Norway’s sovereign wealth fund has excluded US machinery manufacturer Caterpillar and five Israeli banks from its equity portfolio due to concerns over their contribution to human rights violations. The decision was made by the ethics committee for Norges Bank Investment Management, which found that Caterpillar’s bulldozers were being used in the “unlawful destruction of Palestinian property,” while the banks provided financial services necessary for the construction of Israeli settlements in the West Bank.
Facing growing public and political pressure, NBIM has stated it will not withdraw from all its investments in Israeli firms but review its portfolio to ensure compliance with its ethics mandate. The fund has a $2 trillion value and had significant stakes in Caterpillar and the five banks, which will be sold or divested from.
Critics argue that the fund’s decision may have unintended consequences, as it continues to invest in assets of other countries accused of human rights violations, alongside politically controversial sectors like oil. However, NBIM Deputy CEO Trond Grande said the goal is to simplify its portfolio while adhering to ethical guidelines and avoiding investments that could contribute to violating those guidelines.
The move highlights the collision between business and human rights, according to Ana Nacvalovaite, a research fellow at University of Oxford specializing in sovereign wealth funds. While NBIM has not engaged in ad hoc sanctioning, its decision demonstrates the application of universal criteria for its mandates, including long-term returns.
Source: https://www.cnbc.com/2025/08/26/norways-giant-wealth-fund-exits-six-firms-on-israel-concerns.html