In 1990, Norway established the Oil Fund, a long-term investment vehicle to manage the country’s growing oil and gas revenues. Formally known as the Government Pension Fund Global, its primary aims were to safeguard these revenues for future generations and to protect the Norwegian economy, increasingly reliant on oil, from global market volatility. 

Managed by Norges Bank Investment Management (NBIM) with operational independence under the central bank, the Oil Fund invests globally in equities, real estate, government bonds, and renewable energy infrastructure. And since its first deposit in 1996, it has grown substantially to become the largest sovereign wealth fund in the world, with a market value of almost 20 trillion kroner ($1.95 trillion). 

The Fund holds significant stakes in some of the world’s largest companies, with its most significant investments by value in Apple, Microsoft, and Nvidia. Its portfolio is broadly diversified and designed to mirror the global stock market: currently, the Fund is invested in 8,559 companies and owns around 1.5 percent of all publicly listed shares worldwide.

It is also Europe’s largest investor in companies complicit in the economic maintenance and facilitation of Israel’s occupation and genocide in Palestine.

Norway entered 2023 with investments worth around 13 billion kroner ($1.26 billion) in Israeli companies. As the Israeli war effort accelerated, the value of Norway’s investments increased dramatically: by the end of 2024, the Scandinavian state had more than 22 billion kroner ($2.1 billion) invested in Israeli companies. 

The Oil Fund is mandated to consider ethics in its investment practices, yet it has long appeared unwilling or unable to uphold them vis-à-vis Israel. But as pressure for divestment mounts amid Israel’s ever-intensifying onslaught on Gaza, the first major cracks are beginning to show.

On Tuesday, the Norwegian government announced that it would review its investments to make sure the Oil Fund is not supporting Israeli companies that are aiding the occupation or the war in Gaza. Set to be completed by Aug. 20, the review could be a major step on the road to divestment. But will the government follow through — and will it trigger more fundamental reforms in the Fund’s ethical investment practices?

Grounds for divestment

The Oil Fund’s investment mandate states that investments should comply with “internationally recognised principles and standards, such as the UN Global Compact, the OECD Principles of Corporate Governance, and the OECD Guidelines for Multinational Enterprises.” But it is its own Ethical Guidelines, established in the early 2000s, that serve as the main ethical framework.

To ensure compliance with international human rights standards and its own ethical investment guidelines, the Oil Fund has two main instruments. The first is the practice of active ownership, through which it exercises shareholder rights by voting at company meetings and engaging directly with companies in its portfolio. 

In the summer of 2024, for instance, NBIM voted against a proposed $56 billion compensation package for Tesla CEO Elon Musk. The vote sparked a widely publicized fallout between Musk and NBIM CEO Nicolai Tangen, culminating in leaked text messages between the two and Musk subsequently declining a private dinner invitation at Tangen’s home. The Fund holds $14.2 billion in Tesla shares, representing 1.1 percent of its total equity holdings.

The second mechanism is the Council on Ethics, an independent advisory body that assesses whether companies in the Fund’s portfolio align with its Ethical Guidelines. The Council can recommend that NBIM exclude companies found to be involved in serious or systematic violations of human rights or humanitarian law. 

The guidelines also prohibit investments in companies that produce specific categories of weapons (such as cluster munitions, landmines, or nuclear weapon components), as well as those involved in tobacco, cannabis, coal production, or coal-based power generation.

In 2024, the Council reviewed around 250 companies and recommended divestment from 15 of them. And since the start of Israel’s military campaign in Gaza, it has increased its scrutiny of Israeli firms. 

In late 2024, NBIM divested from the Israeli energy company Paz Retail and Energy, citing its operation of fuel infrastructure serving Israeli settlements in the occupied West Bank. Another divestment followed earlier this year, when NBIM sold its holdings in Israeli telecom company Bezeq, in line with a Council recommendation. In both cases, the Council cited the companies’ role in facilitating “the maintenance and expansion of … settlements, which are illegal under international law.”

Despite recent exclusions, however, the Oil Fund still holds shares in 65 Israeli companies, with a combined value exceeding $2 billion. According to Historikere for Palestina — a volunteer group of historians from eight Norwegian universities — at least 30 of these companies warrant divestment under the Fund’s ethical investment guidelines. 

Profitable complicity

Historikere for Palestina’s comprehensive investigation used primary sources to assess all Israeli companies in the Fund’s portfolio. Their final report, submitted to the Finance Ministry, Norges Bank, and the Council on Ethics on June 30, concludes that 30 of these companies are complicit in Israel’s occupation of Palestinian territories and the ongoing genocide in Gaza. These include ICL Group, Bank Hapoalim, Hilan, One Software Technologies, and Nice Ltd.

ICL Group, whose origins lie in the Palestine Potash Company founded through British government concessions in 1929, is deeply embedded in Israel’s violations of international law in the occupied Palestinian territories. It is a major supplier of fertilizers and other agricultural inputs to illegal settlements and extracts brine and water from illegally occupied areas such as the northern Dead Sea.

Through its mining operations in the Naqab/Negev desert, ICL Group is also involved in the ethnic cleansing of Palestinian Bedouins inside Israel’s pre-1967 borders. Additionally, the company is among the world’s leading producers of white phosphorus, which is sold to the Israeli army by way of American military contracts. Israel has used white phosphorus in civilian areas in both Gaza and Lebanon, which is forbidden under international law. 

Through its Oil Fund, Norway has a 1.58 percent ownership stake in ICL Group worth over $100 million, as well as $23 million in Israel Corp LTD, ICL’s holding company.

The Oil Fund also maintains investments in Bank Hapoalim, one of Israel’s largest banks and a well-documented financier of Israeli settlement expansion. It operates branches in settlements in both the West Bank and the Golan Heights, and has financed infrastructure projects, including wind farms, in these occupied territories.

Bank Hapoalim is listed in a database of companies contributing to or benefiting from the Israeli occupation, compiled by the Office of the UN High Commissioner for Human Rights (OHCHR). Several international banks and pension funds have already divested from it on these grounds. The Norwegian Oil Fund currently holds a 1.39 percent stake in the bank, worth approximately $222 million.

Historikere for Palestina also points to the Oil Fund’s investments in Israeli technology firms involved in surveillance and population control in the West Bank. Among them are Hilan, in which the Fund has invested $9.2 million, and One Software Technologies, in which it owns a $4.7 million stake. 

Together with their subsidiaries, these firms provide consulting, operations, and IT support for the Meitar system — a biometric identification and mobility control platform used at Israeli military checkpoints throughout the West Bank that enables real-time tracking of Palestinian movement and is a key component of Israel’s broader infrastructure of occupation.

The Fund additionally holds $70.2 million in NICE Ltd, a cybersecurity and surveillance company founded by veterans of Unit 8200, the Israeli army’s elite signals intelligence squad known for its role in highly intrusive surveillance of Palestinians. NICE supplies surveillance technology to Israeli defense companies, including Rafael and Elta Systems, both of which provide military equipment and services used in the occupied Palestinian territories.

Similarly, Next Vision Stabilized Systems manufactures surveillance drones and drones designed for “target acquisition” — such as the Raven 2.5 and the Condor — which have, in severaldocumented cases, been used to target civilians in Gaza. Its current clients include major players in Israel’s defense sector: Elbit Systems, Israel Aerospace Industries (IAI), Aeronautics (a Rafael-owned company), and the Israeli Defense Ministry. 

These ties to Israel’s military-industrial complex have proven highly profitable during the war on Gaza. In the first quarter of 2024, Next Vision reported a 220 percent surge in sales and a more than threefold increase in net profit — from $4 million to $14.5 million — compared to the same period the previous year. Total revenue reached $27.2 million, a jump the company attributed to a sharp increase in orders from Israeli clients since the war began.

Passing the buck

In Norway, public outrage over Israel’s onslaught in Gaza has sparked a broad, civil society-led campaign to divest publicly owned wealth from companies complicit in the occupation and genocide of Palestinians.

In May, 50 Norwegian civil society organizations — including Amnesty International Norway, the Norwegian Confederation of Trade Unions (LO), and Save the Children — signed a joint letter to Finance Minister Jens Stoltenberg, urging his ministry to instruct the Central Bank to divest from all companies where there is an unacceptable risk of complicity in violations of international humanitarian law in the occupied Palestinian territories. The campaign, titled “My Oil Fund, My Choice,” has since gone viral on social media.

Public opinion appears to support this push. A survey conducted by Respons Analyse on behalf of Amnesty International Norway found that 78 percent of Norwegians believe the Oil Fund should avoid investing in companies complicit in human rights violations, while 62 percent believe the Fund should not invest in companies operating in the occupied territories.

Amnesty International Norway was an early advocate for the Oil Fund’s ethical investment framework, and has been one of the key drivers behind the ongoing push for divestment. Speaking to VG, Norway’s biggest newspaper, earlier this year, Amnesty advisor Astri Menne Sjoner questioned whether the Fund’s ethical framework is functioning as intended, noting that the Oil Fund remains invested in 13 companies currently listed in the OHCHR database.

“The blame game has gone on for far too long,” Menne Sjoner said. “Everyone points fingers at each other to take ethical responsibility. Ultimately, the political responsibility lies with the Storting [the Norwegian parliament], to develop or tighten the guidelines.”

She pointed to what has been described as a persistent passing of the buck between the Fund’s management, its Council on Ethics, the Storting, and the Finance Ministry — an impasse that has continued since the campaign started gaining traction. While the Council on Ethics says it is operating within the limits of its current mandate and that further action would require new guidelines in the form of legislation or government directives, the Finance Ministry and the Labor leadership maintain that the existing guidelines are adequate.

This passing of the buck became particularly apparent in early August. The Norwegian newspaper Aftenposten revealed — based on research by Historikere for Palestina — that in 2023, the Oil Fund had invested in the Israeli company Bet Shemesh Engines Holdings, which produces and maintains engine components for Israeli fighter jets employed in the service of bombing Gaza. The Fund’s ownership share in the company has increased since. 

When confronted with the findings, Fund CEO Nicolai Tangen responded by noting that the company is not on the Council on Ethics’ exclusion list, adding: “We have a clear division of responsibilities, where it is the Council on Ethics that assesses the ethical questions surrounding our investments.” Historikere for Palestina warned of Bet Shemesh’s involvement with the Israeli military already in late June.

Even the chief architect of the Oil Fund’s ethical guidelines, University of Oslo law professor Hans Petter Graver, is now urging a full exclusion of Israeli firms. “This would be consistent with the spirit we worked from when we developed the Oil Fund’s ethical guidelines,” he said this week.

Cracks appearing

An interim climax came on June 4, when the Storting voted on a proposal brought forward by the Socialist Left Party to withdraw the Oil Fund’s investments from Israeli companies contributing to occupation and war crimes. 

The proposal was backed by several parties, but failed to gain a majority after both the Labour and Conservative parties voted against it. Nevertheless, the parties supporting the motion have pledged to make the Fund’s investments a key campaign issue in the lead-up to this autumn’s parliamentary elections.

Norway’s substantial investments in companies tied to the occupation have also drawn international scrutiny. In her recent report titled “From economy of occupation to economy of genocide,” Francesca Albanese, the UN Special Rapporteur on the Palestinian Territories, highlighted numerous corporations that sustain Israel’s occupation or directly support its genocide in Gaza. 

The report notes that by the end of 2024, the Oil Fund held investments worth $121.5 billion — 6.9 percent of its total value — in companies named in the report. Among these is Palantir, the U.S. tech firm founded by Peter Thiel, which, through partnerships with the Israeli government, provides AI targeting systems reportedly used in Gaza, similar to those previously exposed by +972 Magazine. 

Thus, with its aforementioned holdings in Next Vision Stabilized Systems, the Fund may realistically be financing both the targeting software that misidentifies Palestinian civilians as combatants and the drones used to carry out their killing.

Another firm highlighted in Albanese’s report is U.S. equipment manufacturer Caterpillar, in which the Fund owns stocks worth $2.1 billion. In collaboration with Israeli tech firms such as IAI, Elbit Systems, and RADA Electronic Industries, the Israeli military has modified Caterpillar’s D9 bulldozer into an autonomous, remotely operated weapon central to its operations. 

Since October 2023, Caterpillar machinery has been documented in widespread use during mass demolitions — including the destruction of homes, mosques, and critical infrastructure — as well as in assaults on hospitals and incidents where Palestinians have been crushed to death. 

It is worth noting that Norway’s largest private pension fund, KLP, divested from Caterpillar in June 2024, citing “concerns about its role in human rights abuses in occupied Palestine.” KLP had already excluded a number of Israeli companies from its portfolio in 2021 for similar reasons, including Paz Energy, Bezeq, and Bank Hapoalim. The pension fund has additionally divested from international companies that sell arms to the Israeli military, such as Motorola and the German weapons manufacturer ThyssenKrupp. 

Despite growing pressure both domestically and internationally, however, the Norwegian government has so far resisted divestment. In response to a letter from Albanese, sent during the preparation of her report, Finance Minister Jens Stoltenberg reaffirmed his belief that the Oil Fund’s investments do not violate Norway’s obligations under international law. 

But that may be about to change. As pressure reached boiling point following Aftenposten’s coverage of the Fund’s investment in Bet Shemesh Engines and later NextVision, the Finance Ministry requested a review from the central bank and the Council on Ethics into the Fund’s investments in Israeli companies, to be completed in the next two weeks. 

Precedent for intervention

In its 2024 annual report, the Fund’s Council on Ethics acknowledged the gravity of the ethical challenges posed by Israel’s “occupation of the West Bank and the war in Gaza,” and said it was currently reviewing its portfolio in light of these concerns. However, with its five members and nine-person secretariat, the Council operates with limited capacity and must monitor a vast and complex investment portfolio. Notably, the recent exclusions of Bezeq and Paz Energy were based on recommendations issued six months prior.

But limited institutional capacity is only part of the story. The Council was never designed to respond rapidly to fast-moving political or humanitarian developments; its mandate allows only for the investigation of individual companies, not for sector-wide exclusions or blanket bans. A broader policy shift would require direct instruction from the Finance Ministry.

Such intervention is not without precedent. In February 2022, shortly after Russia’s full-scale invasion of Ukraine, the ministry instructed the central bank to immediately freeze all investments in Russia and to prepare a plan for full divestment. So far, Finance Minister Stoltenberg has refused to issue similar instructions regarding Israeli companies.

Stoltenberg insists that the two situations are not comparable: Russia was under broad international sanctions, while Israel is not. While technically true, this argument only serves to underscore the fact that the Fund is more attuned to the geopolitical consensus than to international law itself. 

There is a certain irony to this. One of the key arguments against divestment has been the need to preserve the Fund’s independence and avoid politicization. Yet its inaction on Israel is itself shaped by political context. 

Another factor slowing the Council’s investigations is the significant normative weight its decisions carry. Given that other investment institutions often follow the Oil Fund’s lead, the Council approaches each case with what has been described as quasi-judicial rigor. This thoroughness lends credibility to its conclusions — but it also means that investigations are long, meticulous, and slow-moving.

But as Historikere for Palestina pointed out, neither a lack of institutional capacity nor the slow pace of the Council’s decision making process fully explain the Fund’s behavior. In 2023-24, while the Fund was actively divesting from Paz Energy, it was simultaneously increasing its holdings in Summit Real Estate Holdings Ltd — a company that was itself acquiring shares in Paz (and has since become the company’s largest shareholder).

Nor does it account for the continued investment in AFI Properties, a company whose subsidiary, Danya Cebus, is deeply involved in construction projects in illegal settlements across the West Bank and East Jerusalem, including Har Homa, Gilo, Modi’in Ilit, and Maaleh Adumim.

AFI’s other subsidiaries raise similar red flags. Cebus Rimon built a military base in Be’er Sheva, where the Israeli army collaborates with Ben Gurion University and private companies on military innovation. Another subsidiary, Geo Danya, helped construct the wall surrounding the Gaza Strip in 2018, contributing to the blockade and confinement of its Palestinian residents.

Is upheaval afoot?

Norway’s stated foreign policy positions — including political support for Palestinian statehood, continued funding for UNRWA amid defunding efforts, and public commitment to uphold the rulings of the International Criminal Court — stand in stark contrast with its unwillingness to end its financial support for Israel’s occupation.  This dissonance  highlights the artificial divide between politics and finance, a line that has effectively shielded both state-linked financial instruments and private enterprises from meaningful scrutiny.

Sovereign wealth funds like the Norwegian Oil Fund sit at the heart of this tension. Though publicly owned and state-managed, they operate under frameworks more akin to private enterprises when it comes to human rights obligations. This ambiguity allows them to benefit from the credibility of public ownership without the ethical responsibilities that normally apply to states. 

As Historikere for Palestina’s initiators, Pål Nygaard and Eli Morken Farstad, told me, this information is publicly available and did not require extensive resources to uncover. “Our analysis shows that the system of ethical oversight is not functioning,” Morken Farstad said. “The Council has far greater resources and access than we do,” Nygaard added. “If we can piece this together in our free time, the Council has no excuse. It’s failing to do its job, and politicians are failing to ensure that it does.”

Timing may also be playing a role. Norway is set to hold parliamentary elections in September, and the governing Labor party is campaigning on a platform of economic stability in an increasingly volatile world. Despite Labor’s recent boost in the polls, any move that could be construed by its opposition as politicizing the Oil Fund could provide political fodder to the right. 

With the Fund’s investments in Israel now under review, though, campaigners pushing for divestment may be about to see some of their demands met.

Considering the scale of Israeli war crimes and the extent to which the private sector is entangled in Israel’s war economy, only a blanket divestment — comparable to the Fund’s withdrawal from Russian companies in 2022 — would likely meet relevant international legal standards while also satisfying Labor’s ambition to resolve the issue ahead of  parliamentary elections in September. As the domestic campaign has focused its efforts on Israeli companies, those international companies singled out elsewhere (such as Caterpillar, Palantir, and ThyssenKrupp) will seemingly remain in the Fund’s portfolio.

Still, more fundamental reforms to the Fund’s investment practices remain unlikely. There is little reason to expect that the review will lead to a comprehensive integration of ethical considerations, or an institutional expansion of the Council on Ethics. Nor is it likely — as Professor Graver, the chief architect of the Fund’s ethical guidelines, proposed — that the Fund will be subjected to stronger political oversight. After all, such a shift would demand a fundamental rethink of what it means to practice ethics in the world of global finance, in which the threshold for accountability remains abysmally low.