Norway's sovereign wealth fund, the world's largest, has sold its remaining shares, thus divesting from Israel's largest telecoms company, Bezeq, as it provides telecoms services to the Israeli settlements in the occupied West Bank, it said late 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, Israel's largest telecoms group, declined to 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 contributing to violating 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 $23.7 million at the end of June, down from a holding of 2.2% at the start of the year, fund data showed.
Sources close to the company said that the divestment's impact was "negligible" as it amounted to 0.7% of the shares and that the move was a "political decision."
They noted Bezeq was allowed to provide telecom services to Jewish settlements in Area C under the 1994 Oslo Accords – which also called for the Palestinian Authority to set up its own telecoms network to Palestinian areas.
"Bezeq is operating according to the Oslo agreements, so it's a political decision," said one source. "Of all the companies to choose from (to divest), Bezeq should have been the last."
Norway recognized Palestine as a state in May, alongside Spain and Ireland, and it attracted the ire of Israel.
Three decades ago, Norway was a facilitator in the 1992-1993 talks between Israel and the Palestinian Liberation Organization (PLO) that led to the Oslo Accords 1993.
Area C, which comprises about 60% of the West Bank, is under full Israeli control and contains most Israeli settlements.
The Norwegian Central Bank was not immediately available to comment.
The fund 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 conflict with international law" according to an Aug. 30 letter it addressed to the finance ministry.
Since the war in Gaza in October 2023, the council has 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.
