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The U.S. State Department said it was “very troubled” by the fund’s decision to divest from Caterpillar over the use of the company’s equipment by Israeli authorities in Judea and Samaria and Gaza.
By Shula Rosen
Norway’s parliament has approved a temporary halt to ethical divestment decisions by the country’s $2.1 trillion sovereign wealth fund, clearing the way for a full review of the rules that govern how the world’s largest state investment vehicle evaluates companies involved in conflict zones, including Israel.
The vote followed a proposal introduced earlier Tuesday by the Labour minority government. Lawmakers backed a one-year suspension of recommendations from the fund’s independent ethics council, which normally investigates alleged violations and advises the central bank on whether to divest from specific firms.
Finance Minister Jens Stoltenberg told Parliament the current framework, adopted in 2004, no longer reflects the realities the fund faces. “The world has changed since the ethical guidelines were first adopted,” he said, explaining that a comprehensive review is necessary before additional exclusion decisions are taken.
The guidelines prohibit investment in companies tied to serious abuses in war or conflict situations. They drew renewed international scrutiny in September after the U.S. State Department said it was “very troubled” by the fund’s decision to divest from Caterpillar over the use of the company’s equipment by Israeli authorities in Gaza and Judea and Samaria.
The issue also featured prominently in Norway’s recent election campaign, when several parties pressed for the fund to pull out of companies linked to Israel’s military operations. One party said it would only support a Labour-led government if Norway divested from all firms it claimed were connected to “Israel’s illegal warfare in Gaza.”
Stoltenberg argued that freezing divestment recommendations is necessary to protect the fund’s long-term stability, noting that Norway now relies on the fund for roughly a quarter of its public spending. He warned that strict interpretations of the current rules could one day force the fund to exit major global technology companies that now represent a large portion of its holdings.
“The seven most valuable companies in the world provide 16% of the fund’s stock holdings,” he said, listing Nvidia, Microsoft, Apple, Amazon, Alphabet, Meta and Broadcom. Excluding firms of that scale, he added, would make it impossible for the fund to continue functioning as a broad global index fund.
The Conservative Party supported the temporary freeze but questioned the speed of the decision, noting that changes of this magnitude normally take far longer to advance through Parliament. The review is expected to last about a year. Donate to vital charities that help protect Israeli citizens and inspire millions around the world to support Israel too! Now more than ever, Israel needs your help to fight and win the war -- including on the battlefield of public opinion. Antisemitism, anti-Israel bias and boycotts are out of control. Israel's enemies are inciting terror and violence against innocent Israelis and Jews around the world. Help us fight back!
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