European 'Green' Funds Hold Billions in Fossil Fuel Companies

European "green" funds holding more than $33bn (£25bn) of investments in major oil and gas companies have been revealed by an investigation, despite fossil fuels being the root cause of the climate crisis.

- Damian Carrington, Giorgio Michalopoulos, Stefano Valentino

Some of these investment funds used branding such as Sustainable Global Stars and Europe Climate Pathway.

More than $18bn was invested in the five biggest polluters: TotalEnergies, Shell, ExxonMobil, Chevron and BP. These topped a 2023 Carbon Majors ranking for oil and gas production among shareholder-owned firms.

Other investments by funds following EU sustainable finance disclosure regulations (SFDR) included those in the US fracking company Devon Energy and Canadian tar sands firm Suncor, the investigation by Voxeurop and the Guardian found.

Investors claim that holding a stake in a company allows them to influence the firm's pursuit of climate goals. However, no major oil and gas producer has plans consistent with international climate targets.

The investment firms with the biggest stakes in fossil companies in their green funds were JP Morgan, BlackRock, and DWS in Germany.

The companies have not breached the SFDR rules, which do not explicitly rule out some fossil fuel holdings.

"For a fund claiming to be 'green', holding investments in major fossil fuel companies should be a red line," said Giorgia Ranzato, the sustainable finance manager at Transport & Environment (T&E). "Since oil majors are not contributing meaningfully to the energy transition, any investment in such companies by a green fund is essentially greenwashing. To effectively combat this, T&E and other organisations advocate for a meaningful review of the SFDR."