Norway's $1.9 trillion sovereign fund divests from Israeli companies amid backlash over Gaza humanitarian crisis

Mint

a day ago

Norway's $1.9 trillion sovereign wealth fund, officially known as Norges Bank Investment Management (NBIM), has divested from 11 Israeli companies and is terminating all contracts with external managers in the country, due to immense public pressure over links to the humanitarian crisis in Gaza, Bloomberg reported on August 12.
Notably, NBIM is the world's biggest sovereign wealth, and as such, backlash over the fund's investments in Israeli companies has grown due to allegations of genocide and war crimes by the IDF against civilians in Gaza.
In a statement, the NBIM said that the fund held stock in some 61 Israeli companies till June 2025, with CEO Nicolai Tangen adding: 'We are taking these measures in a very special conflict situation.' He also described the situation in Gaza as 'a serious humanitarian crisis.'
According to the BB report, Norway's sovereign fund is largely an index tracker, but has some room for active management. In its statement, NBIM said it will end all its active management in Israel — representing a fraction of the 0.1% of its total Israeli holdings — and that it has already sold all stocks in the 11 companies that are not part of the index.
The fund also said it will remain invested in some but not all of the Israeli companies in the index.
NBIM — which owns about 1.5 per cent of the world's stocks — has long sought to remain apolitical, though its mandate includes guidelines set by parliament that reflect broadly held public views on issues ranging from land mines to climate change.
It is advised by an external ethics council, which assesses the portfolio on an ongoing basis and recommends companies for exclusion or observation.
Still, NBIM's position as the world's biggest sovereign wealth fund has drawn the attention of politicians and activists. In 2022, the fund decided to freeze and sell its Russian holdings in response to Moscow's full-scale invasion of Ukraine. Later that year, a government-appointed panel warned that the fund was likely to face increasingly challenging moral dilemmas.
In a recent poll, 78 per cent of respondents said they wanted NBIM to exclude companies that do not respect human rights. The fund has previously excluded 11 companies due to their activities in the West Bank.
Norway recognized Palestinian statehood in May last year, and has repeatedly called for Israel to let more humanitarian aid into Gaza.
Finance minister Jens Stoltenberg ordered a review of all Israeli investments last week after the newspaper Aftenposten reported that one of the fund's holdings, Bet Shemesh Engines, services fighter jets used to attack Gaza.
NBIM first bought a 1.3 per cent holding in Bet Shemesh Engines in 2023, and increased its position to 2.1 per cent last year, according to its website.
The debate over the fund's holdings in Israel comes at a sensitive time for the ruling Labor Party in Norway, which is leading in opinion polls ahead of next month's parliamentary elections. The Labor Party has been critical of Israel's war, saying it violates international law. The Green Party, one of the smaller opposition forces, has called for the resignation of Tangen, the fund's CEO, and the Socialist Left has demanded a review of what the government knew about the investments.
'Because we are approaching an election, various parties are using this to advance their own interests and define themselves,' said Karin Thorburn, who teaches at the Norwegian School of Economics and the Wharton School at the University of Pennsylvania. Still, she said, 'no one wants the oil fund to become a political tool, because that creates a slippery slope.'
(With inputs from Bloomberg)