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Norway’s sovereign wealth fund has recorded a substantial increase in the financial value of its Israeli corporate portfolio, triggering sharp criticism and ethical concerns from human rights advocates, non-governmental organizations, and legal scholars as the conflict in the Gaza Strip persists.
Despite scaling back its overall presence in the country the previous year, the world’s largest sovereign fund reported that its remaining Israeli investments generated $2.4 billion during the first six months of 2026. This performance marks a 15.7 percent increase in value compared to figures recorded at the close of 2025, achieved without purchasing additional shares in any Israeli enterprises.
Originally created in the 1990s to invest surplus revenues from Norway’s oil and gas production, the massive institution—frequently called the "oil fund"—is managed by Norges Bank under mandates established by the Norwegian Ministry of Finance. Its vast holdings give it considerable sway in global markets, amplifying the scrutiny surrounding its portfolio choices.
The surge in returns follows a significant restructuring in 2025, when fund administrators reduced their holdings in Israel from 61 companies down to 29, pointing directly to the severe humanitarian crisis unfolding in Gaza. However, civil society organizations contend that maintaining lucrative stakes in the remaining firms undermines the nation's human rights commitments.
Rami Samandar, who leads Norway’s Palestine Committee, criticized the fund's continued exposure to enterprises linked to the Israeli armed forces. He emphasized that the fund wields immense financial and geopolitical leverage, arguing that channeling public wealth into businesses that facilitate military campaigns, occupation practices, and related security infrastructure directly contradicts Norway's international legal duties.
Samandar further asserted that through these specific capital allocations, the Scandinavian nation is failing to uphold its global responsibilities to prevent abuses, thereby indirectly assisting in the sustained occupation and suppression of the Palestinian population.
Much of the criticism centers on individual corporate holdings within the fund's active portfolio. Among them is NextVision Stabilized Systems, an Israeli firm that specializes in stabilized camera equipment for aerial drones. The fund’s stake in NextVision expanded from $21 million in 2025 to $25.9 million in the first half of 2026. The company supplies state-owned Israel Aerospace Industries, the nation’s primary aerospace and defense contractor that equips the military.
Addressing this connection, Mads Harlem, an international legal expert representing Save the Children Norway, argued that the wealth fund must divest from NextVision unless the enterprise demonstrates comprehensive mechanisms to ensure its technologies do not aid in violations of international humanitarian law.
Other portfolio holdings have also drawn intense scrutiny from monitoring organizations. According to the research group Who Profits, the fund maintains an interest in One Software Technologies, a contractor responsible for servicing biometric identification hardware utilized by the Israeli Civil Administration at West Bank checkpoints. Additionally, the fund holds shares in Formula Systems, which delivers software capabilities to the armed forces through its subsidiary TSG.
Ethical concerns have also been raised regarding the fund's 1.65 percent equity holding in ICL Group. According to the academic network Historians for Palestine, ICL Group participates in mining operations in the Naqab Desert that displace indigenous Palestinian Bedouins into constrained zones, while also supplying chemical fertilizers to settlements in occupied territory.
Pal Nygaard, a professor at BI Norwegian Business School and representative of Historians for Palestine, expressed deep frustration over the fund's retention of NextVision and other controversial assets. Nygaard argued that despite clear evidence connecting these companies to alleged war crimes, the fund has refrained from exiting its positions, urging authorities to fully exclude Israeli enterprises from the state portfolio.
Harlem cautioned that retaining these financial ties risks establishing a damaging precedent across international capital markets. He warned that institutional inaction sends a message to global investors that rigorous conflict-related due diligence and human rights assessments can be safely neglected without financial or reputational consequence.
Activists have drawn direct parallels between the current policy and the decisive measures implemented in 2022 following Russia’s invasion of Ukraine. At that time, Norwegian authorities acted swiftly to freeze all sovereign wealth assets invested in Russian companies, a standard that campaigners argue should be equally applied to firms implicated in breaches of international law in the Middle East.
In response to the growing public pressure, a representative for Norges Bank Investment Management stated that the fund's broader ethical guidelines are undergoing an official reassessment. The spokesperson explained that the finance ministry instituted temporary rules while this review takes place, prohibiting the central bank from making determinations on observing or excluding individual corporations until the updated framework is finalized.
The institutional review is scheduled to conclude by October 15. In the interim, management maintains that it must adhere to the benchmark index designated by the Ministry of Finance, which formally includes the Israeli market in its global investment parameters.
However, legal specialists like Harlem warn that this transitional phase creates an unacceptable governance vacuum, leaving Norway temporarily incapacitated from enforcing its strict obligations under international humanitarian law. The debate unfolds against a complex diplomatic backdrop, as Norway formally recognized a Palestinian state in 2024 and continues to advocate for a two-state solution.
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