2024-10-17 10:57:00
The NGO ClientEarth has submitted a report to the Financial Markets Authority (AMF) regarding investment funds that BlackRock describes as “sustainable”, but which the NGO accuses in a press release on Thursday of partly funding oil or coal majors .
According to calculations by the British organization ClientEarth, 18 private investment funds, marketed in France under names containing the word “sustainable”, together hold more than a billion dollars in fossil fuel investments.
For example, a fund of almost 6 billion dollars, called “sustainable energy fund”, contained at the end of November 2023 almost 730 million dollars in shares of fossil fuel sector players, such as TotalEnergies, Shell or Eni, listed company ClientEarth.
In the fund’s prospectus, BlackRock specifies that it invests only “70% of its total assets in equity securities of sustainable energy companies.”
According to the NGO, the 18 targeted funds have exposure to fossil fuel promoters of between 0.8% and 18% of assets under management.
ClientEarth, which says it is “relying on the law” to combat climate change, believes in its report to the Financial Markets Authority (AMF) that these investments deviate from the legal obligation to communicate with investors.
“We believe that using the term ‘sustainable’ to describe funds that invest in fossil fuel developers, or in projects not aligned with the temperature reduction targets set out in the Paris Agreement, is misleading,” he explains in a press release.
Contacted by AFP, BlackRock responds that the funds it manages “complie with their investment objectives, which are clearly stated in the prospectus” and with “applicable sustainable investment rules”.
ESMA, the European financial markets authority, published directives in May requiring fund managers whose name includes “sustainable” to exclude companies whose turnover is linked to 1% of coal or 10% to oil.
Existing funds have until May 2025 to comply.
In 2020, the AMF highlighted the risk that the “rapid development of +sustainable+ management” would lead to a “risk of +greenwashing+” if “good information for investors” was not respected.
ClientEarth believes that “the AMF can demonstrate leadership on this important issue and set the standard for financial regulators in other countries to follow.”
When contacted, the AMF explained that it would not make “any comments regarding individual files in particular”.
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