Group 1 - The U.S. State Department expressed concern over the Norwegian sovereign wealth fund's decision to divest from Caterpillar and Israeli banks, citing illegitimate claims related to the Gaza conflict [2][3][6] - The Norwegian sovereign wealth fund, valued at approximately $1.98 trillion, has reduced its investments in Israeli equities from 61 to just 6 stocks [10] - Norges Bank Investment Management (NBIM) stated that the decision to exit Caterpillar was based on ethical guidelines, as the company’s products were allegedly used in the destruction of Palestinian property [5][6][10] Group 2 - Norwegian Finance Minister Jens Stoltenberg clarified that the government does not influence the fund's investment decisions, which are made independently by the fund's Executive Board [3][4] - The fund's ethics council had previously recommended divesting from Caterpillar due to concerns over human rights violations [6][9] - The divestment from Caterpillar and Israeli banks was part of a broader strategy to simplify the fund's portfolio in response to increased scrutiny and ethical considerations [9][10]

Core Insights - The world's largest sovereign wealth fund, Norges Bank Investment Management (NBIM), has divested from U.S. machinery manufacturer Caterpillar and five Israeli banks due to concerns over their involvement in conflicts in the West Bank [2][3] - NBIM's decision was influenced by its ethics council, highlighting the risk of these companies contributing to serious violations of individual rights in war situations [3] - The fund's divestment includes a $2.4 billion stake in Caterpillar, which was reportedly involved in the unlawful destruction of Palestinian property [4] Company Actions - NBIM will divest from several Israeli banks, including First International Bank of Israel, Bank Leumi, Mizrahi Tefahot Bank, and Bank Hapoalim, due to their financial services supporting construction in Israeli settlements deemed illegal under international law [5] - The fund is under increasing political and public pressure to divest from firms linked to conflicts in Palestinian territories, especially with upcoming elections in Norway [6] Investment Strategy - NBIM is reviewing its investments in Israeli companies following a request from Norway's Ministry of Finance, which raised concerns about the situation in Gaza and the West Bank [7] - The fund plans to sell all holdings in Israeli companies outside its equity benchmark index and has already reduced the number of Israeli companies in its benchmark from 56 to 38 [7] - NBIM is balancing its mandate to generate high net returns while managing potential political backlash in the U.S., where approximately 55% of its equity investments are located [8]