Green-labeled funds invested billions in top fossil fuel polluters despite climate-friendly branding.
\n London
\nAn international investigation has revealed that European investment funds branded as \u201cgreen\u201d under the EU\u2019s Sustainable Finance Disclosure Regulation (SFDR) are holding more than $33.5 billion in fossil fuel stocks, including major oil and gas companies like ExxonMobil, Shell, BP, Chevron, and TotalEnergies.
\nDespite their eco-friendly branding, such as Sustainable Global Stars and Europe Climate Pathway, these funds collectively held over $18 billion in the top five shareholder-owned polluters.
\nThe funds are registered under SFDR\u2019s Articles 8 and 9, which were designed to promote environmental or sustainable investment goals but do not explicitly prohibit fossil fuel holdings.
\nAmong the biggest fossil fuel investors were JP Morgan Asset Management and its UK arm with $3.2 billion, DWS in Germany with $2.2 billion, and BlackRock Investment Management UK with $1.7 billion.
\nFund names and marketing strategies are now facing growing scrutiny as new ESMA (European Securities and Markets Authority) guidelines, aimed at curbing greenwashing, come into effect on May 21, 2025.
\n\u201cWe need strict rules that ban investments in companies developing fossil fuels from any fund with an ESG-related description,\u201d said Paul Schreiber of Reclaim Finance.
\nCampaigners argue the SFDR has failed to provide adequate safeguards, allowing firms to use ESG terminology while backing companies that are expanding fossil fuel operations.
\nOne such example includes Legal & General Investment Management\u2019s (LGIM) Europe Climate Pathway fund, which held $88 million in Shell, BP, and TotalEnergies.
\nSimilarly, Robeco\u2019s Sustainable Global Stars fund had $40 million in Total Energies and has since announced it will drop \u201csustainable\u201d from the name. State Street Global Advisors UK\u2019s World ESG fund also held $43 million in oil majors.
\nA Carbon Tracker report from April noted that no major oil and gas company has business plans aligned with international climate targets, and several have weakened their commitments in the past year.
\nStill, investment managers claim that by maintaining stakes in these firms, they can push for improved climate policies from within.
\nCritics remain skeptical. \u201cFor a fund claiming to be \u2018green\u2019, holding investments in major fossil fuel companies should be a red line,\u201d said Giorgia Ranzato, sustainable finance manager at Transport & Environment (T&E).
\nThough ESMA\u2019s new guidelines are non-binding, they give national regulators the authority to demand transparency from asset managers and to sanction misleading environmental claims.
\nThese rules also introduce standards for \u201ctransition funds,\u201d which must demonstrate clear and measurable paths toward environmental improvement.
\nResponding to the investigation, BlackRock stated that its sustainable funds comply with all applicable regulations and that investment goals are fully disclosed.
\nHowever, the firm, along with JP Morgan Asset Management, has already announced plans to strip ESG-related terms from several fund names.
\nAs regulators brace for the implementation of the new rules, critics argue that the SFDR must undergo further reform to exclude fossil fuel investments entirely from funds marketed as sustainable.
\nThe findings arrive amid increasing public scrutiny over corporate climate pledges and the integrity of sustainable finance.<\/p>\n","protected":false},"excerpt":{"rendered":"
Green-labeled funds invested billions in top fossil fuel polluters despite climate-friendly branding. London An international investigation has revealed that European investment funds branded as \u201cgreen\u201d under the EU\u2019s Sustainable Finance Disclosure Regulation (SFDR) are holding more than $33.5 billion in fossil fuel stocks, including major oil and gas companies like ExxonMobil, Shell, BP, Chevron, and […]<\/p>\n","protected":false},"author":2,"featured_media":479517,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-479567","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n