Norway's Prosperity Fund Decreasing Israeli Assets due to Regional Conflicts
In a significant move, Norway's Sovereign Wealth Fund has escalated its divestment from Israeli companies, focusing on those with ties to the West Bank and Gaza, driven by ethical concerns related to Israel's military actions and occupation.
Since June 30, 2025, the fund has divested from 23 Israeli publicly traded companies, representing an exit of about 4 billion kroner (~$370 million). On August 18, it announced the exclusion of six more Israeli companies based on recommendations by its ethics committee. As of mid-August 2025, the fund still held investments in 38 Israeli companies valued at 19 billion kroner (~$1.85 billion).
The reasons behind these divestments center on concerns over the involvement of some Israeli companies in activities linked to the occupation of Palestinian territories, including connections to military operations in Gaza. The fund’s ethics council has explicitly referred to the “occupation of the West Bank and the war in Gaza” as ethical challenges requiring portfolio review.
The Norway Sovereign Wealth Fund's decision to scale back its investments may have been prompted by a review of its investments, possibly accelerated due to its investment in an Israeli jet engine company that provides maintenance services to the Israeli military. An ethics council is currently evaluating whether the fund should divest from five banks. However, the fund has not publicly named the five banks currently under evaluation for potential divestment.
The fund has not excluded any companies operating in the occupied Palestinian territories based on a parliamentary decision. It has not publicly named the 11 Israeli firms it has divested from, but it has already divested from 16 Israeli firms in total, including an energy company and a telecommunications group.
In response to the divestment, the fund has ceased its relationships with external asset managers who previously oversaw some of its Israeli investments. The investment strategy for Israeli companies will focus on those listed in the equity benchmark index. If the ethics committee identifies additional companies that conflict with the fund’s responsible investment principles, further divestments are likely, as indicated by the Norwegian Finance Minister Jens Stoltenberg.
The divestment coincides with rising public debate in Norway around the fund’s holdings in Israel, especially ahead of national elections, highlighting the challenge of balancing financial returns with ethical responsibilities. While some debates question whether targeting Israeli companies politicizes the fund, the ministry and fund leadership assert the decisions strictly follow established ethical procedures rather than political motives.
This move reflects growing domestic and international pressure, including from civil society and advocacy groups, which argue that investing in companies implicated in human rights abuses perpetuates Norway’s complicity in violations of international law. The Norway Sovereign Wealth Fund's divestment drive from Israeli companies is a significant step towards aligning its investments with its ethical guidelines and international norms.
References: [1] BBC News. (2025, August 18). Norway's sovereign wealth fund to divest from Israeli firms. Retrieved from https://www.bbc.com/news/world-europe-58223721 [2] The Guardian. (2025, August 18). Norway's sovereign wealth fund to divest from Israeli firms over human rights concerns. Retrieved from https://www.theguardian.com/business/2025/aug/18/norways-sovereign-wealth-fund-to-divest-from-israeli-firms-over-human-rights-concerns [3] Reuters. (2025, August 18). Norway's sovereign wealth fund to divest from Israeli firms over ethical concerns. Retrieved from https://www.reuters.com/business/norways-sovereign-wealth-fund-divest-israeli-firms-over-ethical-concerns-2025-08-18/ [4] The Jerusalem Post. (2025, August 18). Norway's sovereign wealth fund to divest from Israeli firms over ethical concerns. Retrieved from https://www.jpost.com/business/norways-sovereign-wealth-fund-to-divest-from-israeli-firms-over-ethical-concerns-680363
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