Norway wealth fund excludes Caterpillar and five Israeli banks

By Gwladys Fouche

OSLO (Reuters) – Norway’s $2 trillion wealth fund, the world’s largest, said on Monday it has divested from U.S. construction equipment group Caterpillar and from five Israeli banking groups on ethics grounds.

The five banks are Hapoalim, Bank Leumi, Mizrahi Tefahot Bank, First International Bank of Israel and FIBI Holdings, the fund said in a statement.

The six groups were excluded “due to an unacceptable risk that the companies contribute to serious violations of the rights of individuals in situations of war and conflict,” said the fund, which is operated by Norway’s central bank.

The companies did not immediately reply to requests for comment. The Israeli embassy in Oslo declined to comment.

Prior to its divestment, the fund held a 1.17% stake in Caterpillar valued at $2.1 billion as of June 30, its records showed.

The stakes in the five Israeli banks were valued at a combined $661 million, also as of June 30, according to fund data.

The news was announced when the Tel Aviv and New York stock exchanges were closed.

Shares in Caterpillar were down 0.4% in pre-market trading at $430.61 per share on Tuesday.

FIBI Holdings shares were up 4%, putting them on course for their best day since early 2024. Hapoalim’s stock was up 3.3% and Bank Leumi, Mizrahi Tefahot Bank, and First International Bank of Israel were between 1.8% and 2.8% better off.

Israeli shares have soared since Hamas’ attacks in October 2023. Bank Leumi has risen 120% since then, while the rest of the banks the wealth fund has divested from have climbed between 48% and 70%.

CATERPILLAR

The fund’s ethics watchdog, called the Council on Ethics, said that “in the council’s assessment, there is no doubt that Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law”.

Bulldozers manufactured by Caterpillar “were being used by Israeli authorities in the widespread unlawful destruction of Palestinian property,” it said.

The violations were taking place both in Gaza and the West Bank, the council said, adding that “the company has also not implemented any measures to pre­vent such use”.

“As deliveries of the relevant machinery to Israel are now set to resume, the council considers there to be an unacceptable risk that Caterpillar is con­tributing to serious violations of individuals’ rights in war or conflict situations.”

The council, a public body set up by the Ministry of Finance, checks that firms in the portfolio of the fund meet ethical guidelines set by Norway’s parliament. The fund is invested in some 8,400 companies worldwide.