December 8

Leading ‘Sustainable’ Investment Funds Backing Fossil Fuels, Research Finds

By Christopher Deane

Major investment funds available to UK consumers are marketing themselves as “sustainable” and “ethical” while financing fossil fuel companies, research has found.

Numerous asset managers are using “green” terms in their branding despite investing in oil giants, with the worst performer being a fund managed by BlackRock, a report by the Ethical Consumer magazine shows.

The news comes amid growing scrutiny of “greenwashing” in the investment world, with the Financial Conduct Authority currently consulting on new rules to tackle the issue and HSBC recently having a series of adverts banned for misleading customers about the bank’s environmental efforts.

Edward Lander, the report’s lead author, said: “We are in an absurd situation in which asset managers can label funds as “sustainable” while still investing in the world’s largest fossil fuel companies. The lack of regulation makes for a Wild West of sustainable fund management”.

Ten percent of the 108 funds examined had holdings in fossil fuel companies and a further 14 percent did not disclose all their holdings, preventing consumers from knowing whether their investments were financing oil, gas, or coal developments.

Many of the funds analysed also had no clear policy for excluding fossil fuels from their portfolios or a commitment to actively invest in climate solutions, such as renewable energy.

Photo courtesy of Zbynek Burival.


Source: DeSmog (link opens in a new window)

climate change, greenwashing, renewable energy, sustainable finance