Norway Fund Divests From Caterpillar Over Israel Concern

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Norway’s largest pension fund, KLP, announced on Wednesday that it will divest from Caterpillar Inc. due to concerns that the heavy machinery sold by the U.S. company to Israel is used in demolishing Palestinian homes and infrastructure, particularly in Gaza and the West Bank. KLP cited risks of human rights abuses and violations of international law associated with Caterpillar’s equipment in these regions as reasons for its decision.

Prior to the divestment decision on June 17, KLP held shares in Caterpillar worth 728 million Norwegian crowns (approximately $69 million). Despite engaging in dialogue with Caterpillar over several months, KLP stated that it did not receive satisfactory assurances from the company that it could mitigate the risks of human rights violations.

The backdrop to KLP’s decision includes ongoing confict and tensions in Gaza and the West Bank, with Israeli military actions often involving heavy equipment like bulldozers. KLP had previously excluded 16 Israeli, European, and U.S. companies from its investment portfolio in 2021 due to their links to Israeli settlements in the occupied West Bank, which Norway, among other countries, considers a breach of international law. Israel, on the other hand, disputes these claims and cites historical and security justifications for its actions.

This move by KLP underscores the growing trend among institutional investors to factor in ethical considerations, such as human rights and international law, into their investment decisions, particularly in sensitive geopolitical contexts like the Israeli-Palestinian conflict.