- Massive Sovereign Wealth Fund Ponders Dumping Israeli Stocks
The world's largest sovereign wealth fund, Norway's, has announced its decision to divest from six Israeli companies linked to activities in the Gaza Strip and West Bank. The fund, worth approximately $2 trillion, has not yet disclosed the names of the companies but has promised to make them public after the divestment process is complete.
The decision to divest follows an ethics review triggered by concerns over the companies' involvement with the Israeli armed forces and activities in occupied Palestinian territories. The ethics council identified that some companies provide direct services to the Israeli military, such as maintenance of combat aircraft, while others were found to be complicit in supporting or enabling Israeli activities considered violations under international law.
The Gaza conflict and the ongoing settlement controversies have led to a broader trend among European institutional investors reassessing investments linked to Israel. The Norwegian fund has reduced its Israeli portfolio from 61 to 38 companies since late June 2025 and continues to shrink holdings further based on ethical assessments.
Despite this divisive process, Norway's parliament in June rejected a proposal to divest completely from all companies operating in the occupied Palestinian territories, balancing ethical considerations with political and economic factors. The fund has also terminated contracts with external asset managers handling some Israeli investments, signaling stricter oversight.
The fund pledged to continue quarterly ethics reviews of Israeli companies and adjust holdings accordingly. It remains invested in dozens of Israeli companies, though many are under scrutiny by civil society groups advocating further divestment based on allegations of complicity in occupation and related human rights violations.
The conflict in the Gaza Strip was not discussed during meetings with one of the companies, Bet Shemesh Engines, which provides services to the Israeli military, including maintenance of combat aircraft. The risk assessment of Bet Shemesh Engines was changed from "medium risk" to "high risk" in May.
Nicolai Tangen, the CEO of the sovereign wealth fund, admitted that the risk assessment should have been changed earlier. Finance Minister Jens Stoltenberg stated that the sovereign wealth fund should not invest in companies involved in the occupation of the West Bank and the Gaza war.
This divestment marks a significant step in the international community's efforts to address the ongoing conflict and human rights concerns in the Gaza Strip and West Bank. The fund is actively reshaping its portfolio with continued monitoring expected amid geopolitical sensitivities and evolving conflict dynamics.
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