A new report authored by Francesca Albanese, Italian lawyer and Special Rapporteur on the Occupied Palestinian Territories (oPt), has alleged that some of the world’s largest asset managers are involved in financing entities directly linked to actions in Gaza that multiple UN bodies have described as consistent with the characteristics of genocide.
The report claims major wealth managers have funnelled “critical funding” to both state and corporate actors supporting the Israeli occupation and apartheid system.
This, Albanese argued, stands in stark contrast to many of these firms’ public commitments to the UN Global Compact and the Principles for Responsible Investment.
According to the report, Israel’s military spending surged from 4.2 per cent to 8.3 per cent of GDP between 2022 and 2024, with the uptick partly funded by treasury bonds underwritten by global banks and purchased by leading asset managers. Among those named are BlackRock (US$68 million in Israeli bonds), Vanguard (US$546 million), and PIMCO (US$960 million).
Albanese alleged that this capital flow has enabled the expansion of military operations in Gaza and has raised serious questions about the role of global finance in conflict zones.
“As the main source of finance for the Israeli state budget, treasury bonds have played a critical role in funding the ongoing assault on Gaza,” Albanese wrote.
Compiled from over 200 submissions from governments, human rights groups, companies and academics, the report also pointed to a sharp increase in fundraising by the Development Corporation for Israel – a body that facilitates bond sales for the Israeli government to private individuals and other overseas investors. Since October 2023, its annual bond sales have reportedly tripled, raising nearly US$5 billion from investors.
In addition to bond purchases, Albanese alleged that several large financial institutions are indirectly linked to Israeli military operations in Gaza through equity holdings in defence, surveillance and other companies with close ties to the Israeli military.
The report highlighted BlackRock and Vanguard as major investors in firms such as surveillance giant Palantir, defence giant Lockheed Martin, equipment supplier Caterpillar, energy firm Chevron, and Israeli defence contractor Elbit Systems.
Namely, according to the report, BlackRock, through its iShares ETFs, holds significant stakes in Palantir (8.6 per cent), Lockheed Martin (7.2 per cent) and Caterpillar (7.5 per cent), among others, while Vanguard holds a 9.8 per cent stake in Caterpillar, 9.1 per cent in Palantir, 8.9 per cent in Chevron, 9.2 per cent in Lockheed Martin, and 2 per cent in Elbit Systems.
These investment positions are typically held across mutual funds and ETFs, which the report warned means end investors may be unknowingly exposed to companies involved in the Israeli occupation and alleged war crimes.
Sovereign wealth and pension funds are also named as major financiers, with Albanese accusing the Norwegian Government Pension Fund – known for its stringent ethical guidelines – of having increased its investment in Israeli companies by 32 per cent since October 2023 – now totalling US$1.9 billion.
Moreover, Albanese explained that the financial sector enables companies to access capital not only through direct loans but also by underwriting their debt for sale on private bond markets, adding that between 2021 and 2023 BNP Paribas was a leading European financier of the weapons industry supplying Israel, with Barclays taking over in 2024.
These direct investments, she said, are supported by financial advisory firms and responsible investment associations choosing to exclude human rights violations in the occupied Palestinian territory from their evaluations of environmental, social, and governance (ESG) criteria.
“This allows responsible/ethical investment funds to remain environmental, social and governance compliant despite investing in Israeli government bonds and in shares of companies involved in violations in the occupied Palestinian territory," Albanese added.
She also pointed to a 179 per cent surge in $US-equivalent equity prices on the Tel Aviv Stock Exchange since the start of Israel’s military campaign in Gaza, translating into nearly US$158 billion in gains.
Albanese’s final conclusions are stark: “An international network of corporations has propped up the Israeli economy... Blackrock and Vanguard rank among the largest investors in arms companies pivotal to the genocidal arsenal of Israel.”
In a response to an inquiry by InvestorDaily, a spokesperson for Vanguard said the asset manager maintains “robust policies and procedures to ensure compliance with all applicable laws, regulations, and sanctions in the various jurisdictions in which we operate”.
“This includes adhering to laws that may require specific investment restrictions in companies that are sanctioned for human rights abuses,” the spokesperson said.
BlackRock declined to comment by the time of publication.
Other firms named by Albanese as being “central to Israel’s surveillance apparatus and ongoing Gaza destruction” include Alphabet, Amazon, and Microsoft.
Implications for corporates?
Turning to implications for these firms, Albanese argued that recent legal developments have "significantly reshaped the assessment of corporate responsibility and potential liability" with clear implications for corporate actors.
These include the ICJ’s July 2024 advisory opinion declaring Israel’s occupation and settlement activity in the Palestinian territories illegal, and the ICC’s arrest warrant for Prime Minister Benjamin Netanyahu over alleged war crimes and crimes against humanity.
“The recent and ongoing ICJ and ICC proceedings have removed any possible doubt and put corporate entities – whether subsidiaries, parent companies or direct actors and investors – clearly on notice of the serious risk of being implicated in very serious violations of international law, including human rights violations and international crimes, and of their actions having contributed to or become criminally complicit in these violations and crimes,” Albanese said.
“Israel’s ongoing illegal occupation of the oPt creates an untenable situation for corporate entities to simply continue business as usual,” she continued.
The private sector, she added, “must urgently reconsider all engagement connected to Israel’s economy of occupation and now genocide”.
Albanese’s report is scheduled for presentation to the UN Human Rights Council on Thursday. Although the Council does not possess legally enforceable authority, findings made by UN investigations have sometimes played a role in shaping international legal actions.
