Norwegian wealth fund divests from Bezeq over West Bank services

Oslo — Norway’s sovereign wealth fund, the world’s largest, has sold all its shares in Israel’s Bezeq as it provides telecom services to the Israeli settlements in the occupied West Bank, it said late on Tuesday.

The decision to divest comes after the fund’s ethics watchdog, the Council on Ethics, adopted a new, tougher interpretation of ethics standards for businesses that aid Israel’s operations in the occupied Palestinian territories.

The $1.8-trillion fund has been an international leader in the environmental, social and governance (ESG) investment field. It owns 1.5% of the world’s listed shares across 8,700 companies, and its size carries influence.

It is the latest decision by a European financial entity to cut back links to Israeli companies or those with ties to the country, as pressure mounts from foreign governments to end the war in Gaza.

Bezeq is Israel’s largest telecom group. It did not reply immediately to a request for comment.

“The company, through its physical presence and provision of telecom services to Israeli settlements in the West Bank, is helping to facilitate the maintenance and expansion of these settlements, which are illegal under international law,” the fund’s watchdog said in its recommendation to divest.

“By doing so the company is itself contributing to the violation of international law,” it added.

The watchdog said it noted that the company had said it was also providing telecom services to Palestinian areas in the West Bank, but that did not outweigh the fact that it was also providing services to Israeli settlements.

The watchdog makes recommendations to the board of the Norwegian central bank, which has the final say on divestments.

The advice on Bezeq was the first recommendation to divest since the watchdog toughened its policy in August. More decisions are expected.

The fund has now sold all its stock in the company.

Before that, it had cut its stake during the first half of 2024, owning 0.76% of the company’s shares valued at $23.7m at end-June, down from a holding of 2.2% at the start of the year, fund data shows.

The watchdog’s new definition of ethical breaches was partly based on the International Court of Justice finding in July that “the occupation itself, Israel’s settlement policy and the way Israel uses the natural resources in the areas are in conflict with international law”, according to an August 30 letter it addressed to the finance ministry.

Since the start of the war in Gaza in October 2023, the council had been investigating whether more companies fall outside its permitted investment guidelines.

Before the announcement to divest, the fund had divested from nine companies operating in the occupied West Bank.

Their operations include building roads and homes in Israeli settlements in East Jerusalem and the West Bank and providing surveillance systems for an Israeli wall around the West Bank.

Reuters