Norway Wealth Fund Divests on Ethical Grounds: A Landmark Move in Global Finance

Norway's mammoth $2 trillion wealth fund, the largest in the world, announced a significant divestment on Monday from U.S. construction equipment powerhouse Caterpillar and five Israeli banks. The divestment was driven by ethical considerations, according to a statement from the fund managed by Norway's central bank.

The decision impacts Caterpillar and Israeli banks Hapoalim, Bank Leumi, Mizrahi Tefahot Bank, First International Bank of Israel, and FIBI Holdings. The fund's ethics council cited unacceptable risks associated with these companies' contributions to violations of individual rights amid ongoing conflict scenarios.

Before the divestments, the fund held significant stakes: a 1.17% share in Caterpillar valued at $2.1 billion and stakes in the Israeli banks collectively worth $661 million as of June 30. This move highlights the fund's strict adherence to ethical investing, influencing financial markets globally.

(With inputs from agencies.)