Environment: BlackRock's so-called “sustainable” funds in the sights of an NGO

AFP

The NGO ClientEarth has sent a report to the Financial Markets Authority (AMF) concerning investment funds that BlackRock describes as “sustainable”, but which the NGO accuses in a statement Thursday to partly finance oil majors or coal players. 

According to calculations by the British organization ClientEarth, 18 investment funds intended for individuals marketed in France under names including the word “sustainable” together hold more than a billion dollars of investments in fossil fuels. 

For example, a fund worth nearly $6 billion, called the “sustainable energy fund,” contained nearly $730 million in shares of fossil fuel players, such as TotalEnergies, Shell and Eni, as of the end of November 2023, ClientEarth has identified. 

In the fund's prospectus, BlackRock specifies that it only invests “70% of its total assets in equity securities of sustainable energy companies.” 

According to the NGO, the 18 funds targeted have exposure to fossil fuel promoters of between 0.8% and 18% of assets under management. 

ClientEarth, which says it “relies on the law” to combat climate change, believes in its report to the Autorité des marchés financiers (AMF) that these investments deviate from the legal obligation of fair, clear, and non-misleading communication with investors. 

“We argue that the use of the term +sustainable+ to describe funds that invest in fossil fuel developers, or in projects that are not aligned with the temperature reduction objectives set out in the Paris Agreement, is a misleading approach,” it elaborates in a press release. 

Reached by AFP, BlackRock retorts that the funds it manages are “in accordance with their investment objectives, which are clearly stated in the prospectus” and with “applicable regulations in the field of sustainable investment”. 

ESMA, the European Securities and Markets Authority, published guidelines in May requiring fund managers with “sustainable” in their name to exclude companies with 1% of their turnover linked to coal or 10% to oil. 

Existing funds have until May 2025 to comply. 

In 2020, the AMF noted the risk that the “rapid development of 'sustainable' management” would lead to a “risk of 'greenwashing'” if “proper information for investors” was not respected. 

ClientEarth believes “that the AMF can demonstrate leadership on this important issue, and define the standard to follow for financial regulators in other countries”. 

When contacted, the AMF explained that it did not make “comments on individual cases in particular.” 

 

You liked the article ? It mobilized our editorial staff, which lives only on your donations.
Information has a cost, especially since competition from subsidized editorial staff requires increased rigor and professionalism.

With your support, France-Soir will continue to offer its articles free of charge  because we believe that everyone must have access to free and independent information to form their own opinion.

You are the sine qua non condition for our existence, support us so that France-Soir remains the French media that allows the most legitimate people to express themselves.