Norway wealth fund drops Caterpillar and 5 Israeli banks
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Norway’s $2 trillion wealth fund excluded Caterpillar and five Israeli banks, citing unacceptable risks of contributing to violations of international law in Gaza and the West Bank.
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A Caterpillar machine works on the demolition of a building in downtown Pittsburgh on April 28, 2022. (AP)
Norway’s $2 trillion sovereign wealth fund, the world’s largest, has announced it has divested from US construction giant Caterpillar and five Israeli banking groups over ethics concerns linked to violations of international humanitarian law.
In a statement on Monday, the fund said the excluded institutions include Hapoalim, Bank Leumi, Mizrahi Tefahot Bank, First International Bank of Israel, and FIBI Holdings.
The decision followed recommendations from the fund’s ethics watchdog, the Council on Ethics, which concluded there was an “unacceptable risk” that these institutions and Caterpillar were contributing to serious rights violations in situations of war and conflict.
Caterpillar machinery and violations
The Council on Ethics stated that Caterpillar’s construction machinery has been used to commit “extensive and systematic violations of international humanitarian law” in Gaza and the West Bank. It added that the company has failed to implement measures to prevent such use.
“As deliveries of the relevant machinery to Israel are now set to resume, the Council considers there to be an unacceptable risk that Caterpillar is contributing to serious violations of individuals’ rights in war or conflict situations,” the council explained.
Caterpillar has not yet responded to requests for comment.
Israeli banks and settlements
The Council also scrutinized the role of Israeli banks in underwriting settlement expansion in the occupied West Bank. The practice was flagged as a direct contribution to violations of Palestinians’ rights under international law.
The wealth fund disclosed on August 18 that it would divest from six companies as part of an ethics review connected to the war in Gaza and developments in the West Bank. However, it delayed naming the companies until the stakes were fully sold.
In early August, the fund announced it would divest from 11 Israeli companies, a decision that comes amid reports of its previous investments in an Israeli jet engine manufacturer during the ongoing war on Gaza.
The head of Norges Bank Investment Management (NBIM), Nicolai Tangen, stated that the divestment decision was driven by exceptional circumstances, citing the severe humanitarian crisis in Gaza. He explained that the fund holds stakes in companies operating in a conflict zone, noting the deteriorating conditions in both Gaza and the West Bank.
Tangen noted that this decision would also lessen the oversight burden on the fund's Council of Ethics by reducing the number of Israeli companies under its supervision.
