Norway wealth fund monitoring if companies selling arms to Israel are breaching guidelines

The ethics advisory council for Norway’s sovereign wealth fund announced last week that they are monitoring more closely whether companies that sell arms to Israel are breaching their guidelines.

The council advising the $1.7 trillion fund - the world's largest - highlighted that companies selling arms to Israel could violate a rule which forbids the sale of weapons to states in armed conflict, where the weapons are used in ways that "constitute breaches of the international rules on the conduct of hostilities," a spokesperson said.

The wealth fund, Norges Bank Investment Management (NBIM), considers the Council on Ethics’ recommendations when it invests, and adds companies to watch lists or in some more extreme cases, cuts them entirely from its investment portfolio, Bloomberg reported.

Last month, Svein Richard Brandtzaeg, chair of the council, said Israel’s war on Gaza had prompted it to examine which firms were selling weapons to Israel that were being used in Gaza.

"We are looking at this because of the seriousness of the breach of the norms that we see," he told Reuters in an interview, not specifying how many companies were being probed, but mentioning they could be "both Israeli and non-Israeli".

By the end of 2023, nine companies were excluded by NBIM due to their links with Israeli settlements in the occupied Palestinian Territories.

The fund is forbidden by parliament to invest in firms that produce certain products, including nuclear weapons, landmines, tobacco, and cannabis.

Companies can also be excluded for their conduct, such as human rights violations, environmental damage, or corruption. The fund can put a company on notice to change its behaviour or ask the fund’s management to engage with it directly.

The companies that are to be excluded are not named until the fund has sold the shares.

In December 2022, Israel’s Channel12 reported the wealth fund was considering halting its investments in Israel over illegal settlements in occupied territories.

Last week, Norway also announced its decision to formally recognise Palestinian statehood based on the pre-1967 borders, along with Ireland and Spain.

Prime Minister Jonas Gahr Store said Norway’s decision was "in support of moderate forces that are on a retreating front in a protracted and cruel conflict".

Israel's war on Gaza has killed at least 36,096 Palestinians since 7 October and wounded more than 81,000 others. The bombardment has levelled entire neighbourhoods and wreaked havoc on the enclave's infrastructure.