Norwegian Pension Fund KLP Sells Caterpillar Stake on Israel Concerns

By Dominic Chopping

Norway's largest private pension fund has sold its $69 million stake in Caterpillar over concerns the U.S. manufacturer of construction equipment and heavy machinery may be contributing to human rights abuses in the West Bank and Gaza.

Kiran Aziz, head of the fund's responsible investments, said Caterpillar has supplied bulldozers and other equipment that has been used to demolish Palestinian homes and infrastructure to clear the way for Israeli settlements, and also noted allegations that the company's equipment is being used by the Israeli Defence Force in connection with its military campaign in Gaza following the Hamas attack on Oct. 7 last year.

"Although Caterpillar has shown itself willing to engage in a dialogue with KLP, the company's responses failed to credibly substantiate its ability to actually reduce the risk of violating the rights of individuals in situations of war or conflict, or of violating international law," she said.

"Since the company cannot provide us with assurances that it is doing anything in this regard, we have decided to exclude the company from investment."

The fund said it sold shares and bonds in the company worth 728 million Norwegian kroner ($68.6 million) earlier this month.

Oslo-based KLP, which has total asset of around $100 billion, adheres to a set of responsible investing guidelines based on a UN environmental, social and governance framework. That means it doesn't invest in companies involved in tobacco, coal, alcohol, gambling, some weapons manufacturers, or companies responsible for environmental damage or that violate human rights.

It has already excluded other companies with links to Israeli settlements in the West Bank and recently excluded U.S. companies CoreCivic and GEO Group for violating human rights and labor rights at their refugee reception centers.

In total, the fund has excluded over 750 companies.

Caterpillar didn't immediately respond to a request for comment made outside of U.S. working hours.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

June 26, 2024 03:40 ET (07:40 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.