A recent investigation has revealed that European “green” investment funds hold over $33 billion in shares of major oil and gas companies, despite these firms being the leading contributors to the climate crisis. Some of these funds use names like Sustainable Global Stars and Europe Climate Pathway to promote themselves as environmentally friendly.
More than $18 billion is invested in the five largest polluters: TotalEnergies, Shell, ExxonMobil, Chevron, and BP. These companies topped the 2023 Carbon Majors list for greenhouse gas emissions among shareholder-owned firms. The investigation, conducted by Voxeurop and the Guardian, also found investments in companies like US fracking firm Devon Energy and Canadian tar sands company Suncor within funds that follow EU sustainable finance disclosure rules (SFDR).
Fund managers argue that owning shares gives them a chance to push these companies toward better climate practices. However, a report from Carbon Tracker published in April shows that none of these major oil and gas companies currently have plans that align with international climate targets. In fact, many have recently weakened their climate commitments.
The investment firms with the largest fossil fuel holdings in their “green” funds include JP Morgan, BlackRock, and Germany’s DWS. Although these companies have not broken SFDR regulations—since these rules do not ban fossil fuel investments outright—environmental groups warn this situation misleads investors.
Giorgia Ranzato, Sustainable Finance Manager at Transport & Environment (T&E), said, “A fund calling itself ‘green’ should never invest in major fossil fuel companies. These companies aren’t seriously helping the energy transition. Such investments are just greenwashing.” She added that stronger rules are needed to prevent this practice.
Richard Heede from the Climate Accountability Institute criticized the banks and asset managers, saying, “It’s shocking that billions of dollars flow into big fossil fuel companies under the label of ‘green investing’ when urgent investments are needed in low-carbon energy and carbon removal technologies.”
BlackRock responded, stating their funds follow clear investment goals disclosed to investors and comply with sustainable investing rules. They offer products specifically focused on decarbonization for investors seeking that.
Following the investigation, Robeco announced it would remove the word “sustainable” from its Global Stars fund. The company highlighted the fund’s better CO2 footprint compared to market benchmarks and its active engagement with TotalEnergies.
The investigation examined ownership data from the last quarter of 2024, using the London Stock Exchange Group analytics, identifying $33.5 billion held by green funds in 37 large fossil fuel companies.
These investments were found in funds regulated under SFDR Articles 8 and 9, which promote environmental and social goals or sustainable investments. More than 480 investment firms held shares in fossil fuel companies through such funds.
The study also revealed that in March 2025, over $1 billion in shares of the five biggest fossil fuel companies were held by funds with green-related names:
Legal & General Investment Management’s Europe Climate Pathway fund had $88 million in Shell, BP, and TotalEnergies shares, with a total of $210 million in green funds.
Robeco’s Sustainable Global Stars fund held $40 million in TotalEnergies, with $207 million overall in green funds.
State Street’s World ESG fund invested $43 million combined in the five oil majors, holding $243 million in green funds.
Among financial giants, JP Morgan Asset Management and its UK branch held $3.2 billion, Germany’s DWS had $2.2 billion, and BlackRock’s UK branches had $1.7 billion in fossil fuel investments within their Article 8 and 9 funds and those using green keywords.
Although SFDR rules were not meant for marketing, many firms use these labels to promote their environmental credentials. This continues despite new guidelines issued by the European Securities and Markets Authority (Esma) in August 2024 to curb greenwashing. These guidelines require “transition” funds to prove they are on a clear path toward social or environmental progress. The deadline to apply these rules is May 21, 2025.
BlackRock and JP Morgan have announced plans to remove terms like “sustainable” and “ESG” from some fund names, but critics say they should have acted earlier. Other firms such as JP Morgan, DWS, LGIM, and State Street declined to comment.
While the new guidelines are not legally binding, from May 21 national regulators can require firms to publicly confirm compliance and potentially penalize violations.
Paul Schreiber from Reclaim Finance said, “We need strict rules banning investments in fossil fuel companies from any fund labeled as ESG or sustainable. The current SFDR rules failed to do this. The regulation review must enforce full fossil fuel exclusions.”
An Esma spokesperson explained they are focused on helping national authorities apply the current guidelines. They will consider further changes in the future, based on regulatory reviews and SFDR updates.
TotalEnergies claims its strategy aligns with the Paris Agreement and aims to keep global temperature rise below 2°C. Shell declined to comment, and other fossil fuel companies did not respond.
This article is part of a joint investigation led by Voxeurop with support from Journalismfund Europe.
Related Topics:
