Norway ethics watchdog to probe wealth fund beneficiaries over Israel-Hamas war
Council chair says war prompted investigation of firms selling weapons to Israel for use in Gaza
The ethics council of Norway’s $1.6 trillion wealth fund says it is investigating whether companies in which it holds shares fall outside its permitted investment guidelines due to the Israel-Hamas war.
The world’s largest sovereign wealth fund, which owns 1.5% of the world’s listed shares across 8,800 companies, operates under ethical rules set by parliament, and over the years has divested from nine companies, all Israeli, over activities in Palestinian territories.
Svein Richard Brandtzaeg, chair of the council, said the war had prompted it to examine which firms were selling weapons to Israel that were being used in Gaza.
It could lead to divestments if these weapons are sold to a state that violates humanitarian law, according to the fund’s ethical guidelines.
“We are looking at this because of the seriousness of the breach of the norms that we see,” he told Reuters in an interview.
He did not name companies nor say how many were being probed but said they could be “both Israeli and non-Israeli.”
The fund is forbidden by parliament to invest in firms that produce products including nuclear weapons, landmines, tobacco, and cannabis.
It can also exclude companies over their conduct, for instance involvement in human rights violations, corruption or environmental damage.
The council makes recommendations to the central bank, which often follows its advice to exclude firms, but not always.
It can also put a company on notice to change its behavior or ask the fund’s management to engage with it directly.
Companies to be excluded are not named until the fund has sold the shares.
The council is also taking a fresh look at companies that could be involved in ethical breaches throughout the Palestinian territories, Brandtzaeg said.
“Due to the seriousness of the breach of norms, Israel is now more in focus than before,” he said.
Israeli firms previously excluded had built roads and homes in Israeli neighborhoods in East Jerusalem and West Bank settlements, were leasing premises built in the settlements, and provided surveillance systems for the security barrier built by Israel between it and the West Bank. This included engineering and construction companies such as Shapir Engineering, Danya Cebus, Ashtrom Group, and Electra, according to a Globes report.
Brandtzaeg declined to say which companies were being investigated in the fresh push but said they were involved in “infrastructure.”
The fund held investments worth $1.41 billion in Israel at the end of 2023 across 76 companies, according to fund data, including companies involved in real estate, banks, energy, and telecommunications.
They represented 0.1% of the fund’s overall investments.
Overall, some 95 companies are excluded from the fund following recommendations from the ethics council. Another 84 companies have been excluded directly by the central bank because of their dependence on coal, the most polluting fossil fuel.
Brandtzaeg, a former CEO of Norwegian aluminum producer Hydro, said his advice to companies was to read their own guidelines on human rights.
“When we look into companies that are violating human rights, they have policies, declarations, everything in place, but they don’t do what they say.
“So — do what they say,” he said. “That would be a big step forward.”
Norway is the latest in a series of European countries to reevaluate its arms trade with Israel since the outbreak of the Israel-Hamas war on October 7, when thousands of Hamas terrorists invaded southern Israel, killing some 1,200 people and taking 253 hostages. In response, Israel launched an extensive military campaign aimed at eliminating the terrorist organization and returning the hostages.
Italy announced in January that it had halted exports at the start of the war, and a Dutch court ruled in February that The Netherlands must stop delivering US-owned parts for F-35 fighter jets to Israel.
Also in February, European Union Foreign Policy Chief Josep Borrell urged allies of Israel — primarily the United States — to stop sending the Jewish state weapons, as “too many people” are being killed in Gaza.
Conversely, this week, the US State Department announced that its ongoing assessments find Israel to be in compliance with international humanitarian law.
