Norway’s sovereign-wealth fund is selling shares of Caterpillar due to the company’s connection to property destruction in Palestinian territories. This move is part of Norges Bank Investment Management’s divestments related to the war in Gaza, contributing to Israel’s growing estrangement from Western allies.

The fund, managing nearly $2 trillion in assets, held a stake of about 1.2% in Caterpillar at the end of 2024. Caterpillar did not respond to a request for comment, and the Israeli Prime Minister’s office declined to comment. The fund is also divesting from four Israeli banks over similar concerns.

The Norwegian fund’s investments in Israel have sparked controversy ahead of elections next month. Politicians have pressured the fund to divest from Israel, leading to tensions within the organization. Despite this, the fund follows a detailed ethical process for investment decisions.

An independent council on ethics advised the fund that Caterpillar’s bulldozers are sold to Israel through a U.S. government program and do not have a direct commercial relationship with the Israeli military. However, there is a risk that Caterpillar contributes to violations in conflict zones. The fund is also excluding four Israeli banks from its investments.

Norway, a country that recognized Palestine as a state last year, is among several European nations pushing for a two-state solution in the Middle East. France and the U.K. have also expressed support for recognizing a Palestinian state, while the U.K. sanctioned Israeli government ministers for incitements of violence against Palestinian communities.

Read more at Yahoo Finance: Norwegian Wealth Fund Ditches Caterpillar Over Israel’s Bulldozer Use