Key Takeaways
- • Norway's Government Pension Fund Global (GPFG), the world's largest sovereign wealth fund with $1.95 trillion in assets, divested from 11 Israeli companies in August 2025, with expectations to divest from additional Israeli firms over concerns related to Gaza and West Bank activities.
- • The fund divested from major Israeli financial institutions including First International Bank of Israel, FIBI Holdings, and Bank Leumi Le Israel BM, while simultaneously terminating all contracts with external managers operating in Israel.
- • Norway's exposure to Israeli companies increased significantly despite ethical investment mandates: Israeli holdings grew from approximately 13 billion kroner ($1.26 billion) at the start of 2023 to over 22 billion kroner ($2.1 billion) by end of 2024, before the August 2025 divestment.
- • The GPFG, which owns approximately 1.5 percent of all publicly listed shares globally and holds stakes in 8,559 companies, had previously held positions in 61 Israeli firms before the announced divestments.
- • Norges Bank Investment Management (NBIM), which operates the fund with independence under Norway's central bank, explicitly cited Israel's military actions and blockade in Gaza and the West Bank as rationale for the divestment decisions.
Summary
Norway's Government Pension Fund Global, formally known as the Oil Fund and managed by Norges Bank Investment Management (NBIM), announced in August 2025 that it would divest from 11 Israeli companies and terminate contracts with all external managers operating in Israel. The fund, established in 1990 to manage the country's oil and gas revenues, has grown to become the world's largest sovereign wealth fund with a market capitalization of approximately 1.95 trillion dollars (nearly 20 trillion Norwegian kroner). The divestment represents a significant policy shift for an institution that holds stakes in 8,559 global companies and owns roughly 1.5 percent of all publicly listed shares worldwide.
The divested Israeli firms include major financial institutions: First International Bank of Israel, FIBI Holdings, and Bank Leumi Le Israel BM. NBIM stated that additional divestments from Israeli companies should be expected as the fund continues to review its exposure to the region amid ongoing military operations in Gaza and the West Bank. The announcement follows mounting pressure from civil society organizations concerned about the fund's investment complicity in what some characterize as occupation-related activities.
The timing and scale of the divestment highlight a notable contradiction in the fund's investment practices. Despite an explicit ethical mandate governing its investment decisions, Norway's exposure to Israeli companies expanded substantially during the period of accelerating military conflict. At the beginning of 2023, the fund held Israeli investments valued at approximately 13 billion kroner ($1.26 billion). By the end of 2024—before the August 2025 divestment announcements—these holdings had increased to over 22 billion kroner ($2.1 billion), representing a 75 percent increase despite growing international controversy. The fund's previous portfolio included stakes in 61 Israeli firms, providing substantial scope for the announced divestments and signaling potential for further reductions.
The decision positions Norway's sovereign wealth fund as Europe's largest investor to materially reduce exposure to Israeli equities on ethical grounds, though observers note the action came only after extended civil society advocacy. NBIM's operational independence under Norway's central bank enabled the fund to make this determination without requiring parliamentary approval, though the divestment reflects broader international scrutiny of sovereign wealth fund allocations regarding geopolitical risk and ethical investment criteria.
The divested Israeli firms include major financial institutions: First International Bank of Israel, FIBI Holdings, and Bank Leumi Le Israel BM. NBIM stated that additional divestments from Israeli companies should be expected as the fund continues to review its exposure to the region amid ongoing military operations in Gaza and the West Bank. The announcement follows mounting pressure from civil society organizations concerned about the fund's investment complicity in what some characterize as occupation-related activities.
The timing and scale of the divestment highlight a notable contradiction in the fund's investment practices. Despite an explicit ethical mandate governing its investment decisions, Norway's exposure to Israeli companies expanded substantially during the period of accelerating military conflict. At the beginning of 2023, the fund held Israeli investments valued at approximately 13 billion kroner ($1.26 billion). By the end of 2024—before the August 2025 divestment announcements—these holdings had increased to over 22 billion kroner ($2.1 billion), representing a 75 percent increase despite growing international controversy. The fund's previous portfolio included stakes in 61 Israeli firms, providing substantial scope for the announced divestments and signaling potential for further reductions.
The decision positions Norway's sovereign wealth fund as Europe's largest investor to materially reduce exposure to Israeli equities on ethical grounds, though observers note the action came only after extended civil society advocacy. NBIM's operational independence under Norway's central bank enabled the fund to make this determination without requiring parliamentary approval, though the divestment reflects broader international scrutiny of sovereign wealth fund allocations regarding geopolitical risk and ethical investment criteria.
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