Norway fund's ethics body reviews Israeli bank stakes over West Bank settler loans
The Council on Ethics, opens new tab, a public body set up, opens new tab by the Ministry of Finance, has, however, decided not to object to the Fund's investments in accommodation platforms such as Airbnb (ABNB.O), opens new tab that offer rentals in the Jewish settlements.
The body checks that firms in the portfolio of the world's largest wealth fund meet ethical guidelines set by Norway's parliament.
In an interview with Reuters on May 22, Council head Svein Richard Brandtzaeg said it was examining how Israeli banks offer guarantees that protect Israeli settlers' money if the company building their home in the West Bank should fold.
Other practices are also being looked at "but this is what we can see so far", he said. "That is what is well documented." He declined to say how long the review would take.
Brandtzaeg did not name the banks but, at the end of 2024, the fund owned about 5 billion crowns ($500 million) in shares in the five largest Israeli lenders, up 62% in 12 months, according to the latest data.
The banks - Hapoalim (POLI.TA), opens new tab, Bank Leumi (LUMI.TA), opens new tab, Israel Discount Bank (DSCT.TA), opens new tab, Mizrahi Tefahot Bank (MZTF.TA), opens new tab and First International Bank of Israel (FIBI.TA), opens new tab - did not answer requests for comment.
Since 2020, they have been included in a list, opens new tab of companies with ties to settlements in the occupied Palestinian territories compiled by a U.N. mission assessing the implications for Palestinian rights.
Latterly, investor concern has grown around the world over a 19-month-old Israeli onslaught that has killed more than 50,000 Palestinians and devastated the Gaza Strip in response to an attack by Hamas militants that killed more than 1,200 Israelis.
Around 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem.
Many settlements are adjacent to Palestinian areas and some Israeli firms serve both Israelis and Palestinians.
The United Nations' top court last year found that Israeli settlements built on territory seized in 1967 were illegal, a ruling that Israel called "fundamentally wrong", citing historical and biblical ties to the land.
In mid-2024, the Council on Ethics began a new review, opens new tab of investments linked to the West Bank and Gaza.
It examined 65 companies but recommended only petrol station chain Paz (PAZ.TA), opens new tab and telecoms company Bezeq (BEZQ.TA), opens new tab for divestment, resulting in share sales.
The Council also scrutinised some multinationals to see if their activities in the West Bank met its guidelines.
Among them were the accommodation platforms, including Airbnb (ABNB.O), opens new tab, Booking.com (BKNG.O), opens new tab, TripAdvisor (TRIP.O), opens new tab and Expedia (EXPE.O), opens new tab, named on the U.N. list, opens new tab and accounting for about $3 billion in Fund investments.
But the Council will not recommend watchlisting or divesting from those, Eli Ane Lund, head of its secretariat, said in the joint interview.
"The company's activity must have some kind of influence on the (ethical) violations," she said. "It's not (enough) to have a connection, it has to have something to do with the violation, it must contribute to it."
The Council's recommendations go to the central bank, which is not obliged to follow them but generally does.
If investments are sold, it is done gradually to avoid alerting markets, and the decision is then made public.
Pro-Palestinian campaigners say the Council sets its bar too high for recommending divestments, and that the Norwegian government should instruct the fund to conduct a general divestment from Israel just as it did for Russia in 2022, three days after Moscow invaded Ukraine.
But most lawmakers support the Council's approach, and are set on Wednesday to formally endorse a parliamentary finance committee's decision not to order a wholesale boycott.
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