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White House Pushes Back Against Divestment
The U.S. State Department has expressed strong disapproval of Norway’s $2 trillion sovereign wealth fund’s decision to sell its stake in Caterpillar, calling the move “very troubling.” The criticism follows the fund’s broader announcement that it would also divest from several Israeli banks, citing “unacceptable risk” that these companies may be complicit in rights violations linked to the conflict in Gaza.

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Norwegian Fund Defends Independence
Norway’s Finance Minister Jens Stoltenberg emphasized that the government has no role in selecting or excluding companies from the fund’s portfolio. He stressed that investment decisions are independently made by Norges Bank Investment Management (NBIM) under the guidance of its ethics council and the central bank. Stoltenberg noted that while he recently met U.S. officials to discuss trade, sanctions, and support for Ukraine, the wealth fund’s divestment strategy was “not a topic of discussion.”

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Caterpillar Exit Sparks Diplomatic Friction
At the end of 2023, NBIM held a 1.2% stake in Caterpillar, a New York-listed heavy machinery manufacturer. The decision to exit was influenced by concerns that Caterpillar’s bulldozers had been used by Israeli authorities in the demolition of Palestinian property—an action the fund’s ethics council deemed inconsistent with its guidelines. The divestment marks one of the most high-profile U.S. corporate exits linked to NBIM’s ethical standards.

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Growing Political Criticism from Washington
Beyond the White House, American lawmakers have also voiced anger. Senator Lindsey Graham, a close Trump ally, blasted the Norwegian fund’s move as “shortsighted” and “offensive.” He suggested retaliatory measures such as tariffs or visa restrictions for decision-makers involved in excluding American companies for “geopolitical differences.”

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Norwegian Fund’s Broader Israel Strategy
NBIM’s withdrawal from Caterpillar came alongside a wider rebalancing of its Israel-linked holdings. Earlier this year, the fund announced it would liquidate all Israeli companies outside its equity benchmark index “as soon as possible” and cut ties with external asset managers in Israel. At the end of June, the fund was invested in 61 Israeli equities. Today, its portfolio has been reduced to just six.

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The World’s Largest Sovereign Wealth Fund Under Scrutiny
With assets worth nearly 20 trillion Norwegian kroner ($1.98 trillion), Norway’s wealth fund is the largest of its kind globally, holding positions in over 9,000 companies worldwide. Its ethical investment framework—established to prevent exposure to human rights abuses, corruption, or environmental harm—has long influenced its portfolio decisions. The Caterpillar divestment underscores how NBIM continues to wield significant influence in global markets, often prompting political and diplomatic reactions far beyond Norway’s borders.