Published by Global Banking & Finance Review®
Posted on August 6, 2025
3 min readLast updated: January 22, 2026
Norway's ethics watchdog admits oversight in Israeli investments, reviewing divestment from companies linked to conflict, including Bet Shemesh Engines.
By Gwladys Fouche
OSLO (Reuters) -The ethics watchdog for Norway's $1.9 trillion sovereign wealth fund, the world's largest, said on Wednesday it should have considered whether a company that services Israel's fighter jets ought to be assessed for possible divestment.
The influential fund's holdings in Israel - nearly $2 billion of shares in 65 companies at the end of 2024 - have been under greater scrutiny since the Gaza war with pro-Palestinian activists globally calling for Israel to be shunned.
The Norwegian fund has sold stakes in an Israeli energy company and a telecoms group in the last year, and its ethics council has said it is reviewing whether to recommend divesting holdings in five Israeli banks.
On Monday, Aftenposten daily said the fund had built a stake in 2023-24 in Israeli jet engine group Bet Shemesh Engines Ltd (BSEL) that provides services to the armed forces, including the maintenance of fighter jets.
Norway's government ordered a review of the fund's portfolio on Tuesday to ensure that Israeli companies contributing to the occupation of the West Bank or the war in Gaza were excluded.
It gave 15 days to the watchdog, called the Council on Ethics, and the fund's operator, Norges Bank Investment Management (NBIM), to report back.
The Council on Ethics said it had assessed sellers of aero engines, including Bet Shemesh, some time ago, in relation to a guideline about companies selling weapons to states who use them in violation of conflict norms.
The firm's activities were assessed not to be within that scope, Aslak Skancke, chief advisor to the council, told Reuters. However, maintenance probably should have been considered, he added.
Bet Shemesh did not reply to a request for comment.
ETHICS
The nearly two-year Israeli offensive has killed more than 61,000 Palestinians and devastated the Gaza Strip in response to an attack by Hamas militants that killed more than 1,200 Israelis.
The watchdog investigates whether companies the fund invests in break ethical guidelines set by parliament and makes recommendations. But the final say lies with the board of the Norwegian central bank, which operates the fund.
Separately on Wednesday, Finance Minister Jens Stoltenberg called in fund chief Nicolai Tangen, Central Bank Chief Governor Ida Wolden Bache and Council on Ethics chief Svein Richard Brandtzaeg, to a meeting about the review.
"During the meeting, the finance minister underlined the seriousness of the case as well as its significance and that the review must happen as soon as possible," the finance ministry said.
NBIM declined to comment, citing the impending review.
Tangen told public broadcaster NRK that Bet Shemesh had not been on any list of companies, established by non-government organisations or other bodies, recommended for divestments.
The fund held a 2.09% stake in the company at the end of 2024, the latest fund data available, worth $15 million.
That was up from $3.6 million at the end of 2023, the year it began investing in Bet Shemesh.
The fund's investments in Israel are managed partly internally and partly by external management companies, the fund told Reuters, declining to give further details.
Norway's parliament in June rejected a proposal for the sovereign wealth fund to divest from all companies with activities in the occupied Palestinian territories.
The fund owns 1.5% of the world's listed shares across 8,800 companies.
(Reporting by Gwladys Fouché in Oslo; Editing by Andrew Cawthorne)
The ethics watchdog for Norway's sovereign wealth fund acknowledged that it should have considered the implications of investing in a company servicing Israel's military.
As of the end of 2024, Norway's wealth fund held nearly $2 billion in shares across 65 companies in Israel.
The fund has sold stakes in an Israeli energy company and a telecom group and is reviewing potential divestments from five Israeli firms.
The Council on Ethics investigates whether companies the fund invests in violate ethical guidelines and makes recommendations, although the final decision rests with the Norwegian central bank's board.
The Norwegian government ordered a review to ensure that companies contributing to the occupation of the West Bank or the Gaza conflict are excluded from the fund's investments.
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