The Norwegian parliament halted its sovereign wealth fund’s “ethical divestment” from Caterpillar over the construction firm’s ties to the Israel Defense Forces. The fund, the largest of its kind, holds $2.1 trillion in assets.
“The world has changed since the ethical guidelines were first adopted” in 2004, Jens Stoltenberg, Oslo’s finance minister, told parliament, as legislators voted 85 to 17 to pause the boycott on Tuesday.
“Divestment recommendations will be placed on a temporary hold for a year while the fund’s guidelines are reviewed,” Stoltenberg said.
The decision drew fierce responses from anti-Israel critics, as Stoltenberg said the move was necessary to “protect” the fund, which includes the seven most valuable global companies that account for 16% of the fund’s stock holdings.
Norway has come under pressure from the U.S. government, as Washington is eager to protect American companies and thwart the sovereign wealth fund’s further boycott of Israeli entities.
The U.S. State Department said in August that it was “very troubled” by the fund’s decision to divest from Caterpillar and five Israeli banks, adding that it was “based on illegitimate claims.”
The fund accused Israel of using Caterpillar bulldozers “to commit extensive and systematic violations of international humanitarian law.”
The fund had already divested last year from Bezeq, Israel’s largest telecommunication company, saying that the company violated its ethical standards by servicing Israeli communities in Judea and Samaria.
Two months prior, the fund’s ethics council put new rules into effect targeting companies doing business in Judea and Samaria and those providing weapons to Israel.
At the end of 2024, the fund had invested $2.18 billion in 65 Israeli companies, representing a small fraction of its holdings.
