Norway’s $1.8 trillion sovereign wealth fund will not impose a broad boycott on all companies operating in the Israeli-occupied Palestinian territories, according to a recent decision by the Norwegian parliament’s finance committee. Campaigners had urged Oslo to pull the fund’s investments from all Israeli companies and any firms active in Palestinian areas. However, the committee concluded that only companies directly linked to violations of international law should be excluded from the fund’s portfolio, rejecting a blanket divestment approach. This decision reflects a nuanced stance: generic business activities in these areas do not automatically warrant exclusion, but companies involved in specific unlawful conduct, such as supplying surveillance equipment tailored for Israeli settlers, might be divested.
The International Court of Justice ruled last year that Israel’s occupation of Palestinian territories is illegal, a ruling Israel disputes. Norway’s fund currently excludes 11 companies for supporting Israel’s occupation policies, including the recent divestment from Paz Retail and Energy, an Israeli company operating fuel stations in illegal West Bank settlements. Despite holding over $2 billion in Israeli stocks across 65 companies at the end of 2024, the fund’s ethical guidelines—set by the Norwegian parliament—continue to guide decisions on investment exclusions case by case.
Ethical Standards Drive Selective Divestment
The sovereign wealth fund, the world’s largest, manages investments in roughly 9,000 companies globally and is recognized for its leadership in responsible investing. Its ethics council enforces strict criteria focusing on human rights violations and breaches of international law. The recent sale of shares in Paz Retail and Energy followed a tougher interpretation of these standards, targeting companies that contribute to sustaining illegal settlements. This divestment is the second of its kind since the Gaza conflict intensified in late 2023, following the earlier exclusion of telecom giant Bezeq.
Meanwhile, pressure from Norway’s influential labor union, LO, which supports a full economic boycott of Israeli companies involved in the occupied territories, continues to mount. Yet, the government and parliament favor engagement and targeted exclusions over broad sanctions. The upcoming parliamentary vote on June 4 will formalize this approach, with lawmakers expected to follow party lines.
This measured strategy aims to balance ethical responsibility with practical investment management, avoiding sweeping divestments that could affect numerous multinational corporations with indirect ties to the region. Norway’s fund remains a global benchmark for integrating environmental, social, and governance principles into large-scale investment decisions.
