Tension arises between Norway's national fund and the United States over the sale of bulldozers
Norwegian Sovereign Wealth Fund Divests from Caterpillar Over Ethical Concerns
The Norwegian Sovereign Wealth Fund, the world's largest, has sold its stake in Caterpillar due to ethical concerns over the use of its bulldozers in Gaza and the West Bank. This decision has caused tensions between Norway and the United States, with US Senator Lindsey Graham criticizing the move and suggesting potential trade tariffs or visa restrictions for the fund's managers.
Nicolai Tangen, the CEO of Norges Bank Investment Management, the entity responsible for managing Norway's sovereign wealth fund, previously dismissed asset seizure as any credible risk. However, some Norwegian pundits have raised concerns about risks to the fund's US assets, such as potential seizure or forced debt swaps, especially given uncertainties around economic policies under a possible Trump administration.
The Norwegian Sovereign Wealth Fund, also known as the Government Pension Fund Global, holds stakes in about 8,400 companies globally and owns 1.5% of all listed stocks worldwide. Over half of its assets, more than $1 trillion, are invested in the United States, including equities, Treasuries, and real estate.
Caterpillar, an American multinational corporation that designs, develops, engineers, manufactures, markets, and sells machinery, engines, financial products, and insurance, has not responded to the fund's divestment decision. Its bulldozers are sold by Israel in Gaza and the West Bank, raising ethical issues for the Norwegian fund under its guidelines.
The fund's central bank's board makes divestment decisions based on recommendations from the Council on Ethics, a body established by the Ministry of Finance to ensure investments align with parliamentary ethical standards. Norway's Prime Minister Jonas Gahr Stoere has contacted US Senator Lindsey Graham to discuss tensions arising from the Norwegian Sovereign Wealth Fund's decision to sell its shares in Caterpillar.
US Senator Lindsey Graham, a close ally of former US President Donald Trump, has criticized the Norwegian fund's decision, calling it "offensive." He has suggested potential US trade tariffs or visa restrictions for the fund's managers. However, Graham confirmed receiving Stoere's message, but his office did not comment further on the matter.
Despite the potential tensions, the Norwegian Sovereign Wealth Fund operates independently from the Norwegian government. The fund's CEO, Nicolai Tangen, previously dismissed asset seizure as any credible risk, but the ethical concerns over Caterpillar's bulldozers in Gaza and the West Bank have led to the divestment decision. The fund's actions underscore the growing importance of ethical considerations in investment decisions, a trend that is likely to continue in the future.
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