Environmental law NGO ClientEarth has filed a complaint with France’s financial markets authority against asset management giant BlackRock for allegedly falsely labeling several retail investment funds as “sustainable.”
In its complaint to French regulator AMF, Client Earth said 18 of BlackRock’s actively managed retail investment funds offered in France had the word “sustainable” in their names. However, “each of the covered funds has significant exposure to developing fossil fuel companies.” New fossil fuel projects or capabilities. and/or not phasing out fossil fuel production in line with the Paris Agreement temperature targets. ”Personal investment funds include mutual funds designed for individual investors.
“Recent research has confirmed that greenwashing is rampant among ‘sustainable’ investment funds sold in Europe. Despite the fund’s name, it is heavily exposed to fossil fuel expansion. ClientEarth attorney Robert Clark told Mongabay in an email. “This is undoubtedly a systemic problem for the integrity of the EU and global financial markets, but it also raises legal issues for certain investment funds and their managers.”
According to ClientEarth’s complaint, 12 of BlackRock’s funds have investments in at least one of the world’s largest fossil fuel companies, including Total Energy, ExxonMobil, Shell, BP, Eni, Chevron, ConocoPhillips, and Equinor. There is. “Their development activities make these companies among the world’s most damaging climate change companies,” the paper said.
ClientEarth said two BlackRock funds, the BGF Sustainable Global Infrastructure Fund and the BGF Sustainable Energy Fund, violated the requirements of the European Union’s Sustainable Financial Disclosure Regulations.
The NGO said it would also notify the EU’s independent regulator, the European Securities and Markets Authority (ESMA). According to ClientEarth, ESMA’s guidelines for funds address the risk that “misleading sustainability disclosures” could lead to greenwashing, with a particular focus on funds that use “sustainability-related terms in their names.” That’s what it means.
Asked to respond to ClientEarth’s claims, a BlackRock spokesperson told Mongabay in an email: BlackRock’s Sustainable Funds are managed in accordance with applicable regulations governing sustainable investments. ”
Clark said BlackRock’s response showed that asset managers “have a different understanding of the applicable legal rules.”
“The marketing of these funds violates regulations that require communications with investors to be ‘clear, fair and not misleading’ for the reasons stated in the complaint,” he said. said.
ClientEarth said it hopes the AMF will make clear that “investing in fossil fuel expansion is not ‘sustainable'” and that BlackRock will change the language it uses to promote its investments.
BlackRock is the world’s largest asset manager and the second largest institutional investor in fossil fuels. Therefore, “if the French financial supervisory authority takes enforcement action against BlackRock in response to this complaint, or if BlackRock changes its marketing practices, it could have a ripple effect on the actions of other investment management companies and other financial markets.” “There’s a gender,” Clark said.
Banner image by Rhett A. Butler/Mongabay.
