Norwegian Sovereign Wealth Fund Divests 11 Israeli Companies Amid Gaza Crisis

The Norwegian Sovereign Wealth Fund, one of the world's largest sovereign wealth funds, has announced its divestment from 11 Israeli companies and the termination of all contracts with Israeli external management institutions. This move comes against the backdrop of significant public and political pressure in Norway, particularly in response to the humanitarian crisis in Gaza.

The fund, which manages approximately 1.9 trillion dollars, primarily invests in index-based strategies but retains some active management capabilities. According to a statement released on its official website, the fund had investments in 61 Israeli companies as of the end of the first half of the year, with 11 of these companies not included in any national benchmark indices. These 11 companies have now been completely divested.

The decision to divest was influenced by the ongoing conflict in Gaza, which has been described as a severe humanitarian crisis. The Norwegian public has expressed strong opposition to Israel's actions in Gaza, leading to calls for the fund to review its investments. In response to these concerns, the Norwegian government ordered the fund to review its investment portfolio to ensure that companies involved in the occupation of the West Bank or the conflict in Gaza were excluded from its investments.

The fund's chief executive officer highlighted the unique context of the conflict, stating that the measures were taken in response to the extraordinary circumstances. The fund has a history of adhering to ethical guidelines set by the Norwegian parliament, which reflect public sentiment on issues such as climate change. An external ethics committee provides ongoing advice and recommendations on the fund's investments, including suggestions to divest from or monitor certain companies.

The fund's actions have drawn significant attention from both political and social sectors. In 2022, the fund froze and sold its investments in Russia in response to the conflict between Russia and Ukraine. A government-commissioned report later warned that the fund would increasingly face ethical dilemmas.

The upcoming parliamentary elections in Norway this September have added to the political scrutiny. Some smaller parties have called for the resignation of the fund's CEO, while others have demanded an investigation into the government's knowledge of the relevant investments. An economics professor noted that as the election approaches, political parties are leveraging the situation to advance their own agendas and shape their positions. However, there is a consensus that the fund should not become a political tool, as this could lead to dangerous precedents.