Press release

Paris, November 29, 2022 – European asset managers, including Amundi, AXA IM and BNP Paribas, are continuing to invest funds labelled as sustainable in polluting fossil fuel companies according to a new investigation published today by a consortium of European media (1). Reclaim Finance calls on regulators, including the French Financial Market Authority (AMF), to act to put an end to these practices, which jeopardise the functioning of the markets and the quality of the information given to investors.

The survey screened 838 European funds classified as sustainable (Article 9) by their managers under the Sustainable Finance Disclosure Regulation (SFDR) (2) to identify the presence of aviation and fossil fuel companies (3). Nearly 50% of the funds analyzed included at least one investment in a coal, oil or gas company. TotalEnergies, the world’s seventh largest developer of oil and gas production projects, appears in both Amundi and BNP Paribas’ “sustainable” funds. The Japanese company Marubeni, which plans to build up to 1,300 MW of new coal-fired power generation capacity, is included in BlackRock and Amundi funds.

Lara Cuvelier, investment campaigner at Reclaim Finance said: “This investigation confirms that a large greenwashing market has been created, with asset managers eager to use ‘sustainable’ in their marketing. Regulators urgently need to ensure that environmental claims are based on science. When science says we must immediately stop investing in new oil and gas fields, regulators must sanction any investor who sells so-called sustainable funds that include companies developing such projects.”

European legislation did not initially define the criteria for what qualifies as sustainable, and the European Securities and Markets Authority (ESMA) has called on national regulators to conduct audits themselves to prevent greenwashing (4). The Dutch regulator announced in September that it was launching an investigation into funds following concerns about their sustainability (5). In France, the chairman of the AMF declared that fossil fuels had no place in sustainable funds, but without reinforcing the controls on these funds (6).

“French investors are at the top of the list of Europe’s biggest fraudsters. If AXA and Amundi recently anticipated the criticism by massively downgrading their funds previously sold as sustainable, nothing will prevent them from doing it again. The AMF must urgently define the minimum standards to be respected in order to be labelled sustainable”, concludes Lara Cuvelier.

The findings come a year after the investigation launched by German and US regulators into the ESG funds of German asset manager DWS, the first investigation by authorities in Europe into a case of greenwashing via funds. Last week, widespread declassifications of Article 9 funds attracted media attention and raised the question of misleading communications to investors (7).

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Notes:

  1. See Le Monde, La grande tromperie des fonds d’investissement “verts”, 2022. See also the full results at Follow The Money, The Great Green Investment Investigation, 2022. 44 sustainable funds sold by AXA IM, Amundi and BNP Paribas AM are singled out by the investigation.
  2. The Sustainable Finance Disclosure Regulation (SFDR) aims to provide more transparency in terms of environmental and social responsibility within the financial markets, notably through the provision of sustainability information on financial products. Funds classified as “Article 9” by fund managers are expected to make only sustainable investments, which was recently clarified by European regulators.
  3. Including companies on the Global Coal Exit List or the Global Oil and Gas Exit List.
  4. ESMA,Supervisory briefing – Sustainability risks and disclosures in the area of investment management, 2022
  5. Regulation Tomorrow, AFM announces investigation into SFDR and Taxonomy Regulation compliance by fund managers, 2022
  6. The Business Times, A ‘problem’ lurking in ESG rules is outed by French watchdog, 2022
  7. Novethic, Paradoxical reclassification of Article 9 sustainable funds: attractive for fundraising, at risk on sustainability, 2022