{"id":38021,"date":"2025-09-18T16:07:25","date_gmt":"2025-09-18T14:07:25","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=38021"},"modified":"2026-01-20T11:30:32","modified_gmt":"2026-01-20T10:30:32","slug":"greenwashing-gems-how-asset-managers-play-with-regulation","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2025\/09\/18\/greenwashing-gems-how-asset-managers-play-with-regulation\/","title":{"rendered":"Greenwashing gems: How asset managers play with regulation"},"content":{"rendered":"

Since May 2025, the European Securities and Markets Authority (ESMA) has set minimum criteria for funds that use ESG-related terms in their names [1]. Yet some asset managers are finding ways to exploit loopholes in the rules and retain names with a sustainable connotation while investing in fossil fuel developers. Reclaim Finance identifies several emblematic cases of this well-worn practice and calls on the European Commission to require the exclusion of companies developing new fossil fuel projects from all ESG-labelled funds.<\/p>\n<\/div>

Adding a simple ESG-related term allows a fund to attract more capital by influencing savers\u2019 choices [2] \u2014 an advantage asset managers are eager to seize, as shown by several Reclaim Finance analyses exposing the continued exposure of \u201cgreen\u201d funds to companies developing new fossil fuel projects [3]. To limit such practices, ESMA has published guidelines governing fund naming. The use of terms related to the environment, impact and sustainability in fund names now requires the exclusion of companies heavily involved in fossil fuels from their investments, while those using terms related to transition, social or governance do not.<\/p>\n<\/div>

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The art of renaming not to change a thing<\/h2><\/span>
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Reclaim Finance analyzed 190 funds domiciled in France or managed by a French asset manager that changed their names between May 2024 and May 2025, following the publication of ESMA\u2019s guidelines [4]. Nearly half modified their names to escape certain constraints, while others exploited loopholes in the regulation. Some cases are particularly revealing.<\/p>\n<\/div>

<\/i><\/i><\/span>Amundi S&P World Energy Screened <\/span><\/a><\/h4><\/div>
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According to our analysis, in August the fund invested in more than a dozen companies developing new oil and gas fields, including ExxonMobil, BP and TotalEnergies<\/a><\/span>.<\/p>\n

Initially called Amundi S&P Global Energy Carbon Reduced<\/i>, the fund was renamed to remove the term \u201cCarbon Reduced.\u201d Yet, Amundi now uses the term \u201cScreened\u201d \u2014 not covered by the new regulation \u2014 which could suggest a certain level of rigor in how assets and companies are selected.<\/p>\n

This is not an isolated case: according to Morningstar, the use of the words \u201cScreened\u201d and \u201cSelection\u201d has surged over the past year, ranking first and fourth among the most frequently added terms to fund names during this period [5].<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Action Europe Selection ESR<\/span><\/a><\/h4><\/div>
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According to our analysis, in August the fund invested in TotalEnergies.<\/p>\n

Formerly called ESG Improvers Europe ESR<\/i>, this Amundi fund dropped the term \u201cESG Improvers\u201d which had become more restrictive under ESMA\u2019s new guidelines. It now uses the word \u201cSelection\u201d, vague enough to avoid having to prove that part of its portfolio meets transition requirements.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Amundi MSCI Emerging ESG Broad Transition<\/span><\/a><\/h4><\/div>
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According to our analysis, in August the fund invested in major national oil companies such as Petrobras, Saudi Aramco, Oil India, Adnoc and Sinopec.<\/p>\n

Previously called Amundi MSCI Emerging ESG Broad CTB (Climate Transition Benchmark)<\/i>, the fund remains in the transition category, which does not require the exclusion of fossil fuel companies. Amundi is not using tricks here, but rather exploiting a regulatory loophole: when a fund combines terms linked to environment or impact with those related to transition, only the transition rules apply. This is a notable exception, since in all other cases of combined terms, conditions are cumulative.<\/p>\n

For Amundi alone, at least 10 funds combining ESG and transition terms still invest in companies developing new fossil fuel projects while ESMA\u2019s guidelines came into force.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>SICAV European Catalysts<\/span><\/a><\/h4><\/div>
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According to our analysis, in August the fund invested in French and Austrian oil and gas multinationals, TotalEnergies and OMV.<\/p>\n

Formerly called SICAV European Improvers<\/i>, the fund should, under that name, have demonstrated social or environmental transition commitments. By replacing \u201cImprovers\u201d with \u201c<\/i>Catalysts\u201d<\/i>, Edmond de Rothschild AM sidesteps ESMA\u2019s these requirements while preserving an attractive image.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Conviction Convertibles Europe<\/span><\/a><\/h4><\/div>
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According to our analysis, in August the fund invested in Italian oil and gas major Eni.<\/p>\n

Previously named Change Convertibles Europe<\/i>, this Rothschild & Co AM [6] fund would also have been required to provide transparency on the transition pathways of its investee companies. By opting for the word \u201c<\/i>Conviction\u201d<\/i>, the manager frees itself from this constraint.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div>

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The art of influencing not to change a thing<\/h2><\/span>
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The ease with which some asset managers avoid the main constraints of the regulation is no accident: it stems from the influence they exercised during the drafting of the guidelines.<\/p>\n

Financial players mobilized in large numbers to respond to ESMA\u2019s 2022 public consultation: Amundi, BNP Paribas Asset Management, UBS, BlackRock, JP Morgan AM\u2026 Opposed to the use of Paris Aligned Benchmark (PAB) exclusions \u2014 which require divestment from fossil fuel companies \u2014 they pushed for much looser criteria, particularly for funds claiming to be \u201cESG\u201d or \u201cTransition\u201d [7].<\/p>\n<\/div><\/div><\/div>

BlackRock:<\/strong><\/p>\n

\u201cInvestors express their sustainability needs and preferences in a variety of different ways, not all of which involve avoiding certain companies or sectors. Where those preferences do involve avoiding certain types of exposures, investors do not always seek to avoid the same ones, making a uniform set of minimum exclusion criteria across all products with an ESG- or sustainability-related term in their name problematic.\u201d<\/i><\/p>\n<\/div>

Amundi:<\/strong><\/p>\n

\u201cAs a general comment, we believe that exclusions are not appropriate as minimum safeguards for investment funds. In addition, exclusions generally do not recognize firms that are making efforts to transition.\u201d<\/i><\/p>\n<\/div><\/div><\/div>

With the revision of the SFDR \u2014 the EU regulation on sustainability-related fund disclosures \u2014 approaching, the same lobbying dynamics are playing out: major financial players are multiplying contributions to defend a similar position, notably calling for fossil fuel\u2013related exclusions to be limited to a single category<\/a><\/span>. This would provide companies developing new fossil fuel projects with safe havens within \u201cESG\u201d, \u201cresponsible\u201d, \u201ctransition\u201d or \u201cimpact\u201d funds. If the European Commission adopts these proposals, the loopholes already identified in ESMA\u2019s guidelines would be replicated in the SFDR and facilitate greenwashing.<\/p>\n

To safeguard the credibility of European sustainable finance, a clear red line must be drawn: no fund claiming to be ESG or transition should be allowed to invest in companies involved in developing new fossil fuel projects [8]. Without this, sustainable finance will remain an empty slogan.<\/b><\/p>\n<\/div><\/div><\/div>

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Notes:<\/h3><\/span>
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  1. \u201cGuidelines on funds\u2019 names using ESG or sustainability-related terms<\/a><\/span>\u201d, ESMA, August 2024<\/li>\n
  2. \u201cFund names: ESG-related changes and their impact on investment flows<\/a><\/span>\u201d, ESMA, April 2025<\/li>\n
  3. 70% of passive funds<\/a><\/span> and employee savings funds<\/a><\/span>, as well as 55% of so-called \u201cgreen\u201d life insurance funds<\/a><\/span>, invest in companies developing new fossil fuel projects, Reclaim Finance, March \u2013 June 2024<\/li>\n
  4. Inspired by \u201cFrom \u00ab\u00a0sustainable\u00a0\u00bb to \u00ab\u00a0screened\u00a0\u00bb: 674 funds bypass climate regulation through targeted renaming<\/a><\/span>\u201d, Urgewald and Finanzwende, May 2025; the analysis is based on a sample of 190 funds domiciled in France or managed by French asset managers, including 86 whose name changes allowed the asset manager to circumvent certain constraints imposed by ESMA\u2019s new rules. To analyze this sample, we cross-checked:\n
      \n
    1. the portfolio composition of these funds provided by Morningstar Data Services and extracted the 11th of August 2025;<\/li>\n
    2. the list of companies developing new fossil fuel projects included in the Global Oil & Gas Exit List 2024 and Global Coal Exit List 2024 databases, published annually by the German NGO Urgewald.<\/li>\n
    3. Moreover, we did not count green bonds in the fossil fuel exposures mentioned.<\/li>\n<\/ol>\n<\/li>\n
    4. \u201cESMA Guidelines on ESG Funds’ Names \u2013 Early insights into rebranding activity and portfolio impact<\/a><\/span>\u201d, Morningstar, May 2025<\/li>\n
    5. Contacted by Reclaim Finance, Rothschild & Co AM explained that this name change was unrelated to ESMA\u2019s guidelines, but rather corresponded to a decision made when the fund lost its French SRI (Socially Responsible Investment) label. Amundi, for its part, simply stated that it complies with ESMA\u2019s rules.<\/li>\n
    6. The responses to ESMA\u2019s public consultation are available here: Consultation on Guidelines on funds\u2019 names using ESG or sustainability-related terms<\/a><\/span>. Among the asset managers cited, all opposed applying Paris-Aligned Benchmark (PAB) exclusions \u2014 which require excluding fossil fuel companies \u2014 to all funds using ESG or sustainability-related terms. UBS and JP Morgan AM suggested instead applying Climate Transition Benchmark (CTB) exclusions, which do not cover fossil fuel companies. CTB exclusions were ultimately chosen by ESMA for the \u201ctransition\u201d, \u201csocial\u201d and \u201cgovernance\u201d categories in the final text.<\/li>\n
    7. For more information, see Reclaim Finance\u2019s response to the European Commission\u2019s public consultation: Reclaim Finance Position<\/a><\/span>.<\/li>\n<\/ol>\n<\/div><\/div><\/div><\/div><\/div>

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