Norway's Sovereign Wealth Fund Divests from Bezeq Telecom
Norway's sovereign wealth fund, the largest in the world, has officially withdrawn its investments from Israeli telecommunications company Bezeq due to its involvement in providing services to Israeli settlements in the occupied West Bank. This decision comes after the fund's ethics board adopted a more rigorous interpretation of its ethical standards regarding companies operating in the Palestinian territories.
The $1.8 trillion fund, which holds 1.5% of global listed stocks, made the announcement on December 4, 2024. Bezeq, Israel's largest telecommunications provider, has been criticized for facilitating the maintenance and expansion of settlements deemed illegal under international law. The fund's ethics board stated that Bezeq's operations contribute to violations of international law, despite the company's claims of also serving Palestinian areas in the West Bank.
Ethical Investment Standards and International Law
The Norwegian fund's decision reflects a broader commitment to environmental, social, and governance (ESG) investing. The ethics board's recommendation to divest from Bezeq was influenced by a July ruling from the International Court of Justice, which deemed Israel's settlement policy and resource use in occupied territories inconsistent with international law. Following this ruling, the fund has been scrutinizing its investments in companies linked to activities in the West Bank.
Prior to the divestment, the fund had already reduced its stake in Bezeq from 2.2% to 0.76%, valued at approximately $23.7 million. This move is part of a larger trend, as the fund has previously divested from nine other companies involved in operations in the occupied territories, including those constructing infrastructure for Israeli settlements.
Implications for Future Investments
The divestment from Bezeq signals a significant shift in how sovereign wealth funds approach investments in politically sensitive regions. As global scrutiny of corporate involvement in the Israeli-Palestinian conflict intensifies, other funds may follow Norway's lead in reassessing their ethical investment criteria. This could lead to broader implications for companies operating in contested areas, potentially affecting their access to international capital markets.
The Norwegian Central Bank's board of directors will have the final say on the divestment, but the ethics council's recommendations are expected to carry substantial weight. As the situation in the region evolves, further actions by the fund and similar entities could reshape the landscape of international investment in Israel and the Palestinian territories.
