Norway’s Sovereign Wealth Fund Dumps Caterpillar and Five Israeli Banks Over Human Rights Concerns

A Caterpillar bulldozer was involved in the infamous death of activist Rachel Corrie [GALLO/GETTY]

Norway’s $2 trillion sovereign wealth fund, the world’s largest, has announced it is divesting from U.S. manufacturer Caterpillar and five Israeli banks over allegations of involvement in human rights violations linked to the Israel–Palestine conflict. The move, confirmed on August 25, 2025, underscores the fund’s commitment to ethical investment standards and signals growing international scrutiny of companies tied to the war.

The decision followed an investigation by the fund’s Council on Ethics, which concluded that Caterpillar’s bulldozers and heavy machinery were being used by Israeli forces to carry out widespread and unlawful demolitions of Palestinian homes and infrastructure in Gaza and the West Bank. The council stated there was an “unacceptable risk” that investments in the company would make the fund complicit in serious violations of international law. As of June, the fund held a 1.17 percent stake in Caterpillar valued at more than $2 billion.

In addition, five Israeli banks, Bank Hapoalim, Bank Leumi, Mizrahi Tefahot, First International Bank of Israel, and FIBI Holdings, were excluded from the portfolio. The review found that their financial services directly supported the construction and expansion of Israeli settlements in occupied territories, which are considered illegal under international law. Combined, the fund’s holdings in these institutions were worth around $660 million.

This marks the first time the fund has excluded a non-Israeli company specifically over its role in the conflict, highlighting the significance of the ruling against Caterpillar. Critics say the company has long faced accusations of enabling forced evictions and the destruction of civilian property, though it has consistently denied responsibility for how its equipment is deployed.

Norwegian officials stressed that the move was not politically motivated but guided by strict ethical guidelines that apply to all global investments. Finance Minister Jens Stoltenberg said the decision reflects an effort to balance the fund’s financial independence with public expectations of accountability. He noted that the number of Israel-linked companies in the portfolio has been reduced from 61 to 33 in recent years.

The exclusion of Caterpillar and the banks comes amid heightened political debate in Norway, where the fund’s management has become an election issue. It also adds momentum to broader global discussions about responsible investment and the role of financial institutions in conflict zones.