NBIM Excludes Caterpillar and Five Israeli Banks Over Human Rights Concerns

NBIM Excludes Caterpillar and Five Israeli Banks Over Human Rights Concerns

Norges Bank Investment Management (NBIM), the world’s largest sovereign wealth fund, has divested from U.S. equipment manufacturer Caterpillar and five Israeli banks amid concerns that these companies could contribute to human rights violations linked to the Israeli-Palestinian conflict.
The fund emphasized that it will continue to review its portfolio to ensure compliance with ethical standards without fully withdrawing from all Israeli investments.

Background and Rationale

NBIM manages Norway’s sovereign wealth fund, valued at approximately $2 trillion, on behalf of the Norwegian population. On Monday, the fund’s executive board cited “unacceptable risk” that certain holdings could facilitate serious human rights abuses in conflict zones. This decision followed guidance from NBIM’s Ethics Council.

Caterpillar, whose NYSE-listed shares were valued at $2.4 billion by NBIM at the end of 2024 (about 1.2% ownership), produces bulldozers that the fund claims are being used by Israeli authorities for the widespread demolition of Palestinian property.
NBIM contacted Caterpillar for comment.

The fund also exited investments in the following Israeli banks:

First International Bank of Israel (FIBI) and its parent company FIBI Holdings
Bank Leumi Le-Israel BM
Mizrahi Tefahot Bank
Hapoalim BM

NBIM stated these banks provide financial services supporting construction in West Bank settlements “established in violation of international law.” CNBC reached out to the banks for comment.

NBIM Excludes Caterpillar and Five Israeli Banks Over Human Rights Concerns

Political and Public Pressure

NBIM’s divestment follows intensified scrutiny from politicians and the public over its exposure to companies connected with the Palestinian territories, especially ahead of Norway’s upcoming elections.

In an interview with Dagens Industri, CEO Nicolai Tangen described the fund as being in “crisis” and expressed regret over previously not addressing the fund’s holdings in an Israeli defense manufacturer amid escalating strikes in Gaza.

Earlier in August, NBIM announced a portfolio review of Israeli companies at the request of Norway’s Ministry of Finance, citing deteriorating conditions in Gaza and the West Bank. The fund pledged to sell all Israeli assets not included in its main equity benchmark and terminate contracts with external asset managers in Israel.

As of mid-August, the number of Israeli companies in the benchmark index decreased from 56 to 38.

Balancing Profit and Political Sensitivity

The fund must weigh the pursuit of maximum returns against avoiding political repercussions, particularly from the United States, which supports Israel. Approximately 55% of NBIM’s equity investments are in U.S. stocks, and 70% of its portfolio is equity-based. Its heavy allocation to the technology sector contributed to $222 billion in annual profits last year, though the first quarter of 2025 recorded $40 billion in losses.

Critics argue that NBIM still invests in companies in other countries accused of human rights abuses, as well as politically sensitive sectors such as oil.

Market Impact and Outlook

Despite ongoing conflict, the Tel Aviv Stock Exchange reached record highs in 2025. NBIM Deputy CEO Trond Grande stated on August 12 that the fund will continue investing in Israel via its benchmark index. Grande acknowledged heightened scrutiny in Norway, explaining:

“We are simplifying our portfolio of Israeli equities in accordance with our ethical principles. It’s not about devaluation, but about ensuring alignment with our standards.”

The fund emphasized that its ethical investment framework prioritizes avoiding companies that could directly contribute to human rights violations while maintaining broader market exposure.

Written by Ethan Blake
Independent researcher, fintech consultant, and market analyst.

August 29, 2025

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