Norwegian Wealth Fund Cuts Caterpillar Over West Bank Concerns

Norway’s sovereign wealth fund, the largest in the world, has decided to divest its substantial £1.8bn holding in Caterpillar in response to ethical concerns regarding the use of the company’s machinery in the Israeli-Palestinian conflict. The move was announced after the fund’s ethics council detailed that Caterpillar’s D9 bulldozers were found to be involved in the destruction of Palestinian property in both the West Bank and Gaza.

The ethics council stated unequivocally that Caterpillar’s equipment is used in what they described as “extensive and systematic violations of international humanitarian law”. Despite Caterpillar’s assertion that it sells bulldozers to the United States government and not directly to the Israeli Defence Force (IDF), the Norwegian council maintained that Caterpillar is fully aware the equipment is ultimately transferred to the IDF.

This divestment marks the first time a major Western company has been dropped by Norway’s fund due to ties with Israeli military operations in Gaza and settlement expansions across the West Bank. The fund’s managers clarified that with the resumption of machinery deliveries to Israel, the risk of contributing to serious human rights violations was unacceptable under the fund’s strict ethical guidelines.

In recent weeks, the fund has halved its exposure to Israeli firms, cutting the number of holdings from 61 to 33, as public and political scrutiny heightened. Earlier, the fund also announced it would sell its stakes in five Israeli banks, citing similar concerns over the risk of involvement in breaches of individual rights during conflicts.

At the heart of the controversy is a significant ramp-up in Israel’s settlement construction, with government approvals given for 3,400 new homes in the West Bank. Political developments in Norway, including calls from smaller parties for fund leadership changes, have amplified pressure to sever investments connected to ongoing violence in Gaza and the occupied territories.

The fund’s actions were influenced further by reports that it had recently increased its stake in Israeli defence-linked companies, which faced criticism in the Norwegian press and led to wider debate among policymakers. These steps come amid intensifying international calls for a ceasefire and increased scrutiny of companies linked to the protracted conflict.