Norway’s $1.8 trillion sovereign wealth fund, the largest in the world, announced on Tuesday that it has sold its shares in Bezeq, Israel’s leading telecom provider, due to ethical concerns over the company’s operations in the occupied West Bank.

The decision reflects a stricter interpretation of ethical guidelines by the fund’s ethics watchdog, the Council on Ethics, concerning businesses involved in occupied Palestinian territories. Bezeq has yet to respond to the announcement.

The Council on Ethics cited Bezeq’s provision of telecom services and physical presence in Israeli settlements as facilitating the maintenance and expansion of these settlements, which are deemed illegal under international law.

“By doing so, the company is itself contributing to the violation of international law,” the council stated in its recommendation. While it acknowledged Bezeq’s services to Palestinian areas, it concluded that this did not mitigate the concerns tied to its operations in Israeli settlements.

The Norwegian sovereign wealth fund, a global leader in environmental, social, and governance (ESG) investing, began reducing its stake in Bezeq earlier this year. By the end of June, the fund had decreased its holdings to 0.76% of Bezeq’s shares, valued at $23.7 million, down from 2.2% at the start of 2024. The divestment is now complete following the ethics council’s recommendation.

The Norwegian fund, which holds stakes in 8,700 companies and owns 1.5% of all listed shares globally, is known for its robust ESG standards. Its decision on Bezeq underscores its commitment to ensuring its investments align with international law and ethical guidelines.

This move is expected to prompt further scrutiny of businesses operating in occupied territories and may influence other global investors to review their holdings in similar contexts