Norway has launched a sweeping review of its $1.9 trillion sovereign wealth fund’s investments in Israeli companies after a media investigation revealed that the fund had significantly increased its stake in Bet Shemesh Engines Ltd, a jet engine supplier servicing Israeli military aircraft used in Gaza operations, a move that Prime Minister Jonas Gahr Støre said left him feeling “uneasy”. Under pressure from public outrage and activist groups, Finance Minister Jens Stoltenberg directed Norges Bank Investment Management and the fund’s Ethics Council to reassess all investments tied to Israel, with the explicit aim of ensuring the fund is not linked to companies complicit in the occupation of the West Bank or the Gaza war.
The fund’s holdings in Bet Shemesh rose from 1.3 percent in 2023 to approximately 2.09 percent by the end of 2024, equal to around $15.2 million, none of which had been flagged for exclusion under existing ethical guidelines . At the close of 2024, the fund held investments in 65 Israeli firms worth nearly $1.95 billion.
This review comes amid growing scrutiny of the fund’s limited divestment policy: although Norway’s parliament rejected a motion in June to mandate a wholesale exit from companies operating in occupied Palestinian territories, the Ethics Council has previously targeted only two Israeli firms, telecom operator Bezeq and energy group Paz, for divestment, and is now reviewing stakes in five banks tied to financing of West Bank settlements. Researchers also accused fund leadership of ignoring a 118‑page report submitted in June detailing problematic holdings in defense-related companies criticizing Nicolai Tangen, the fund’s CEO, for failing to act sooner despite clear warning signs.
With parliamentary elections looming in September, the move places Norway’s flagship ethical investor under political and public pressure to align its global portfolio with its human rights mandate. The outcome of the review may lead to further divestments and a recalibration of ethical thresholds for the world’s largest sovereign wealth fund.
