Norwegian wealth fund plans to offload more Israeli shares due to investment concerns in Gaza and West Bank regions
Norway's Sovereign Wealth Fund Divests from Israeli Companies over Ethical Concerns
Norway's Sovereign Wealth Fund, the world's largest, is divesting from Israeli companies due to ethical concerns about their involvement in activities supporting the Israeli military or operations in the occupied Palestinian territories. This decision comes amid the recent escalation in the Israel-Palestine conflict.
The fund's ethics council, which performs quarterly assessments of Israeli companies to ensure alignment with ethical investment guidelines, has been at the forefront of this process. The guidelines explicitly target companies deemed to support Israeli activities in the occupied Palestinian territories. Since late June 2025, the fund has sold stakes in at least 17 Israeli companies whose operations or involvement did not meet these ethical standards.
The divestment process has also resulted in the termination of contracts with external asset managers handling some of the fund's Israeli investments. Norges Bank Investment Management (NBIM), which runs the fund, has divested stakes in 11 Israeli companies, including BSEL, in recent days. The fund's CEO, Nicolai Tangen, stated that there is good reason to believe that there will be further divestments.
The fund is currently reviewing whether to divest holdings in five banks, and the parliament's constitutional and control committee is discussing what to ask Finance Minister Jens Stoltenberg regarding the fund's Israeli investments. Tangen, however, has ruled out stepping down, stating that the fund has not made any formal mistakes and is executing on its mandate.
The reasoning behind this decision is clear: ethical concerns about Israeli companies' activities in the West Bank and Gaza. The fund's ethics watchdog conducted a review triggered by reports that some investee companies, such as Beit Shemesh Engines, provided services supporting the Israeli military, including maintenance of fighter jets. Following this and similar assessments, the fund decided to exclude six more Israeli companies with ties to the occupied Palestinian territories.
Norway faces a general election on Sept. 8, and multiple politicians have called on Tangen to resign over the Israeli investments. However, the fund plans to publicly disclose the names of excluded companies and the specific reasons once divestments are finalized.
It's important to note that the fund's decision to divest from Israeli companies is not a new development. In the last year, the fund has sold its stakes in an Israeli energy company and a telecoms group over ethics concerns. The fund's use of external portfolio managers is also under scrutiny, and NBIM is reviewing its procedures regarding all external portfolio managers and the risk of relationships with Politically Exposed Persons (PEPs).
The fund reported a 698 billion Norwegian crowns ($68.28 billion) profit for the first half of the year, earning an overall return of 5.7% in line with its benchmark index. This profit, driven by good returns in the stock market, particularly in the financial sector, underscores the fund's ability to balance ethical considerations with financial returns.
In summary, the decision by Norway's Sovereign Wealth Fund to divest from Israeli companies is driven by ethical concerns about those companies’ involvement in activities supporting the Israeli military or operations in occupied Palestinian territories. The fund plans to continue this process, with further divestments expected in the coming days and weeks.
- The Sovereign Wealth Fund's decision to divest from Israeli companies is not a new development, as it has previously sold stakes in an Israeli energy company and a telecoms group over ethics concerns.
- The fund's ethics watchdog conducts regular assessments on Israeli companies to ensure alignment with ethical investment guidelines, targeting companies deemed to support Israeli activities in the occupied Palestinian territories.
- Beyond Israel, the fund's use of external portfolio managers is under scrutiny, and NBIM is reviewing its procedures regarding all external portfolio managers and the risk of relationships with Politically Exposed Persons (PEPs).
- The worldwide finance and business communities are paying close attention to the general-news story of Norway's Sovereign Wealth Fund's strategic divestments, as the fund strives to balance ethical considerations with financial returns, making wise investments in the arts and other sectors across the world.
