5 September, 2025

Norway’s giant sovereign wealth fund just made a bold move. The fund, which is built from the country’s oil and gas revenues, aims to safeguard Norway’s future while making sure the money is used responsibly.   

Last week it made headlines for selling its entire stake in Caterpillar, a US construction equipment maker, after reports that its bulldozers have been used to demolish Palestinian homes and property. The fund also confirmed it has sold out of six Israeli institutions found to be providing financial services to Israeli settlements in the West Bank, which are illegal under international law.  

The decision around Caterpillar is particularly interesting. For one, it’s the first time the fund has divested from a non-Israeli company because of its role in Palestinian territories. It’s also based on the way the company’s products are being used in practice, as opposed to necessary intent, alongside the lack of action from Caterpillar to stop this. Norway’s Council on Ethics said: ‘There is no doubt Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law.’ 

This focus on how products are used is a shift to somewhat more ambiguous territory for investors, highlighting the growing complexity around businesses, human rights and ethics. It’s also raised the ire of Trump’s administration, with a US State Department spokesperson saying “we are very troubled by the Norwegian sovereign wealth fund’s decision, which appears to be based on illegitimate claims against Caterpillar and the Israeli government.”  

It seems likely this is a topic that will ripple on, as funds which are firmly committed to operating according to ethical principles find that working out exactly how to apply them can get complicated. And – even when decisions are made by an independent investment Board as in Norway – they can get mired in politics too.

By Bertie Bateman