Norway divests from Israeli energy firm over West Bank operations

Norway’s Sovereign Wealth Fund, the world’s largest state-owned investment fund, has divested from Israel’s Paz Retail and Energy due to the company’s involvement in operating fuel infrastructure in Israeli settlements in the occupied West Bank.

The fund, officially known as the Government Pension Fund of Norway, said on Sunday that it has sold its shares in the Israeli company operating gas stations in the occupied West Bank.

Israeli settlements in the West Bank territory are considered illegal by international law. This is because they violate the Fourth Geneva Convention, which prohibits an occupying power from transferring parts of its own civilian population into the territory it occupies.

According to the Norwegian fund, supporting companies that help maintain those settlements goes against its ethical rules.

The fund holds stakes in around 9,000 publicly listed companies worldwide, amounting to 1.5 per cent of all global shares, and is widely regarded as a global leader in responsible investing.

It operates under a set of ethical guidelines established by Norway’s parliament.

In August 2024, the fund’s ethics watchdog, the Council on Ethics, adopted a stricter interpretation of its ethical standards, targeting companies that support Israel’s activities in the occupied Palestinian territories.

Recommending divestment, the Council on Ethics said, “By operating infrastructure for the supply of fuel to the Israeli settlements on the West Bank, Paz is contributing to their perpetuation.”

“The settlements have been established in violation of international law, and their perpetuation constitutes an ongoing violation thereof.”

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The fund has now fully divested from the company, though it remains uncertain whether additional withdrawals will follow.

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This is not the first time the fund has taken a tough stance on a company due to ethical reasons. Last year, it divested from Israeli telecoms firm Bezeq.

The fund had also sold all its shares in the company due to its role in providing telecom services to Israeli settlements in the occupied West Bank.

“The company, through its physical presence and provision of telecom services to Israeli settlements in the West Bank, is helping to facilitate the maintenance and expansion of these settlements, which are illegal under international law.

“By doing so, the company is itself contributing to the violation of international law,” the Council of Ethics stated.