In a 2020 letter to the chief executives of all of the world’s banks, BlackRock’s CEO Larry Fink wrote that: “The local weather transition presents a historic funding alternative”. The letter, through which the world’s largest asset supervisor outlined the subsequent steps in direction of a web zero world, was picked up by main information organisations resembling The New York Occasions and NBC Information, and was promoted throughout the web, together with on social media platforms. On the New York Occasions’ 2020 Fb submit about it, one person commented: “That is capitalism…it may work for good”; one other mentioned “Lastly they figured it out”; after which there was one last remark which might sound positively prophetic as we speak: “Thanks Mr Fink, please no greenwashing”.
BlackRock isn’t alone in its greenwashing ploy. The German on-line retail chief Zalando and the French tyre big Michelin’s mixed CO2 emissions rival these of a complete nation like Algeria, and nonetheless, are marketed into “inexperienced” investments they market themselves as a part of a “inexperienced and round economic system”. And this is only one instance out of many different extremely polluting firms, as we have now proven in a earlier article. If an asset supervisor promotes one thing as sustainable, can buyers belief their broader claims of being a pioneer in sustainable investing?
Such is the case of Eurizon, an asset supervisor which is managed by Italy’s largest financial institution Intesa SanPaolo, and invests in extremely polluting firms with its supposedly inexperienced funds. Nevertheless, the Italian monetary establishment is only one amongst a lot of its opponents utilizing devious means to get their so-called ‘sustainable message’ throughout, as our investigation reveals.
By working large inexperienced campaigns on their web sites and collaborating in official sustainability occasions, large banks and different monetary establishments are presenting themselves as the brand new saviours of the planet, whereas investing on the planet’s most polluting firms. Nevertheless, their “inexperienced” investments inform a really completely different story. Our investigation, together with a narrative of native activism, exposes this scaled-up greenwashing and disinformation operation and its contradictions.
Fascinating article?
It was made doable by Voxeurop’s neighborhood. Excessive-quality reporting and translation comes at a value. To proceed producing impartial journalism, we’d like your help.
Subscribe or Donate
For Riccardo Torelli, professor of Company Social Duty at Milan’s Cattolica College and co-founder of the Analysis Centre for Duty, Ethics and Sustainability in Administration, there are two fundamental methods to know a enterprise’ sustainability. “A technique is [when] an organization says ‘our enterprise is sustainable’; right here there’s a entire model id situation the place you possibly can affect the notion of the tip buyer,” Torelli informed Voxeurop. “One other means is [the] promotion [of] a single product, i.e. the corporate says ‘our particular product is sustainable’. Right here the shoppers or the investor may certainly have a unique response as a result of they know that normally, aside from that product, the corporate isn’t sustainable.”
However what occurs when asset managers have interaction in a double greenwashing normal, each on the product stage and the model stage? “The share of people that would find yourself being deceived can be very excessive,” predicted Torelli.
And that’s precisely what is going on. In 2023, asset managers invested $87 billion on the planet’s most polluting firms via “inexperienced’” funds, as outlined by the European regulation on sustainable finance. These funds are provided to purchasers with inexperienced claims resembling “sustainability”, “clear power”, “web zero”, whereas $18 billion is invested in excessive carbon emitting firms and nearly $7 billion in fossil gas firms.
Asset managers usually are not alone in utilizing eco-labels to market monetary merchandise which might be removed from climate-friendly. However whereas they’re selling such deceptive merchandise, they’re additionally flaunting a basic company sustainability coverage. Acutely aware buyers due to this fact have to be cautious of the company advertising and marketing of monetary establishments, which our earlier evaluation has proven can manipulate perceptions to make them consider they’re dedicated to a sustainable transition, when their particular person merchandise show the alternative.
As a current European Securities and Markets Authority (ESMA) survey on the implementation of the European regulation on sustainable finance reveals, monetary gamers have been driving the sustainable finance wave extra as a strategy to undertake sustainability-related advertising and marketing methods than to make actually sustainable investments.
In response to 79% of monetary market contributors, together with asset managers and advisors who responded to ESMA’s questionnaire, the regulation is getting used as a advertising and marketing device, whereas its final goal, based on the European Fee, is to “appeal to personal finance to assist Europe make the transition to a net-zero economic system”.
We now have analysed how the highest 10 asset managers investing on the planet’s most polluting firms via their ‘inexperienced’ funds are greenwashing themselves to the general public on sustainable funding points.
Company web sites’ inexperienced spin
A technique of doing it’s getting the buy-in of the mainstream influential media. “We consider that the very best form of sustainable funding is one that’s formed round you,” goes the JP Morgan web site, instantly addressing looking buyers; greater than 4 billion {dollars} are invested on the planet’s most polluting firms via JP Morgan’s “inexperienced” funds. In June 2021, the “Adviser” part of British newspaper the Monetary Occasions printed an article entitled: “JP Morgan launches three sustainability funds”.
In response to this text, one of many funds promoted, the International Sustainable Fairness fund, would exclude investments in “unsustainable” sectors. “The local weather change options fund is designed to assist buyers intelligently seize modern funding alternatives and applied sciences facilitating the low carbon transition,” the article continued. A second strategy to get disinformation throughout is to make sure the message is hammered residence throughout social media websites. Monetary Occasions Adviser then reposted the article on its social media pages.
Immediately, that fund invests practically $20 million within the automotive firms Bridgestone, Burlington, Ross Shops and Stellantis, which collectively generate complete common annual emissions of 360 million tonnes of carbon.*
The disinformation-fuelled rationalization for these investments will be discovered on X (previously Twitter), printed by the channel CNBC Center East on the top of Cop 28 in Dubai. In a video which has been seen practically 19,000 instances, the broadcaster interviewed Chuka Umunna, International Head of Sustainable Options at JP Morgan, who defined: “It isn’t our job to boycott any sector, it is our job to work with purchasers to decarbonise”.
The way in which the message is unfold issues. Riccardo Torelli informed Voxeurop: “The way in which through which prospects obtain info, whether or not informally via a social [media] channel or formally via a press launch or an interview with a senior govt, has a serious influence on the credibility of the knowledge. The corporate’s communication is of such significance that it significantly influences whether or not or not a excessive or low notion of greenwashing is created within the receiving get together”.
So as to add a human dimension to their communication, a 3rd means is to publish movies on their web sites of CEOs speaking about sustainability. “We handle to speculate our cash on behalf of our purchasers in probably the most sustainable means doable,” says Saverio Perissinotto, chairman of Eurizon Capital SGR, which in 2023 can have 2.3 billion “inexperienced” investments on the planet’s most polluting firms, together with nearly 900 million in 17 of the world’s largest CO2 emitting fossil gas firms.
Click on on a picture to see the worlds’ fundamental asset managers’ “inexperienced” funds homepages.
The asset supervisor managed by Italy’s largest financial institution, Intesa SanPaolo, had already been having fun with constructive protection in quite a lot of Italian newspapers all through 2019. The Italian day by day Il Foglio, for instance, printed an interview by the Italian information company Askanews with Simone Chielini, who was then Head of ESG & Strategic Activism at Eurizon. The headline of the article, which was concerning the firm’s sustainable funding technique, was promising: “Eurizon: accountable finance to create worth with sustainability”. The identical interview with the identical headline was republished by the Italian enterprise newspaper Il Sole 24 Ore. Later, in January 2020, La Stampa day by day printed a chunk of sponsored content material entitled “Sustainable progress when shared”, describing Eurizon’s efforts in direction of environmental sustainability.
In 2017 Askanews, once more, printed a video on YouTube referred to as “Eurizon’s ‘sustainable’ alternative”, through which the top of sustainable methods explains how a fund referred to as “Sustainable International Fairness” invests in “firms with sustainable aggressive benefits”. In November 2017, the fund invested in Oil Search, on the time the most important oil and fuel exploration firm in Papua New Guinea (supply LSEG); in automotive investments with French tyre big Michelin; and as we speak invests €3.5 million within the US-based agribusiness firm Corteva, which emits nearly 8 million tonnes of carbon per yr.
Storebrand’s “inexperienced” view
Norway’s monetary providers firm Storebrand has printed a documentary model video on its web site that includes the corporate’s high administration, together with CEO Jan Erik Saugestad, who wears the UN Sustainable Improvement Targets pin on his jacket. Within the video, referred to as “The Home has a View”, Saugestad explains that the financial institution began taking a look at sustainable finance within the mid-Nineties: “At that time limit I believe it’s truthful to say that that was an area occupied by NGOs and actually engaged folks. The finance trade was not likely wanting in that route. We established Storebrand Asset Administration to see, can we develop options that may present a sustainable funding automobile”. In 2023, the corporate invested $1.5 billion on the planet’s most polluting firms via its inexperienced funds, together with practically $6 million in Norwegian delivery firm Wallenius Wilhelmsen Logistics via Storebrand Norge Fossilfri, a “fossil-free” fund.
In 2021 ESG Immediately, a web site protecting sustainable and inexperienced points for buyers, devoted an article to the hiring of Storebrand’s new Head of Sustainable Investments, Kamil Zabieski. The article praises Storebrand, mentioning the way it has been a number one voice amongst funding managers in selling sustainability and utilizing its place to make a distinction. “In June 2020, for instance, the agency led a bunch of 30 funding managers to name on Brazilian authorities to take motion to finish deforestation,” the creator writes. Storebrand, nonetheless, continues to love Brazilian oil. In truth, in 2023, it invested $2.4m in state-owned Petrobras, which can proceed huge oil manufacturing within the nation within the coming years.
Then there may be Amundi, which additionally calls itself “a pioneer and chief in accountable funding”. For instance, its devoted Bioenergy ESG fund invests nearly $8 million in fossil fuels firms ENI and TotalEnergies.* The Luxembourg-based asset supervisor is collaborating in a pot-pourri sequence of funds that string collectively many sustainability-linked components, resembling Amundi’s ESG Local weather Internet Zero Ambition, which invests in a big portfolio of carbon-intensive and polluting manufacturers, together with Spanish fast-fashion firm Inditex (proprietor amongst others of the manufacturers Zara, Masimo Dutti, and Bershka), but in addition Michelin, Toyota and several other fossil gas firms. Within the final quarter of 2023, Amundi invested $1.4 billion on the planet’s most polluting firms via ESG-labelled funds.*
Obtain the very best of European journalism straight to your inbox each Thursday
On its web site, Amundi boasts concerning the awards it has received for its ESG investments. In 2022, for instance, it was named “Greatest ESG Funding Fund” on the ESG Investing Awards, organised by ESG Investing, a media platform the place “fund managers, institutional buyers and listed firms” get “information and options on ESG and sustainable investing”. We contacted the organisers of the awards to seek out out what the award standards have been, which Amundi ESG funds had received specifically, and whether or not they have been conscious of Amundi’s extremely polluting ESG investments, however they didn’t reply. Nevertheless, Amundi used the award to advertise itself on the social media platform X: “Amundi is proud to have been awarded twice by the #ESG Investing Awards 2022, with two prestigious prizes”.
“These methods cowl the entire consideration spans of an individual, from pinpointing their id, which is the best stage, or company communication, to get to the bottom stage, the product itself (i.e. the fund to put money into), and likewise these in between,” says knowledgeable Riccardo Torelli. The type of this latter can have very completely different codecs and “embrace all of the PR and sensational components, resembling awards, appearances at occasions, interviews, articles, all of which serve to verify the technique of the businesses. All of this provides as much as an ideal storm to persuade buyers of the virtues of asset managers”. Within the earlier chapter of this investigation, we uncovered the failure of journalism to level out the position of asset managers within the greenwashing of huge polluters.
From the sector: Debunking greenwashing at BlackRock’s “sustainability summits”
In stark distinction to the media protection, social media movies and posts that are put on the market to greenwash the reality about large funds, a small grassroots organisation from Ohio, in the USA, is utilizing the facility of neighborhood gathering to push again on the viral components of this greenwashing disinformation.
On the Cleveland Sustainability Summit on 23 January 2024, Kaitlin Bergan, head of Sustainable Consumer Options at BlackRock, was invited to present the opening keynote speech entitled: “Buyers Making Sustainable Influence”. However not everybody was listening to her deal with on the Huntington Conference Heart.
“After we discovered that BlackRock was going to be the keynote speaker, we felt there was one thing deeply flawed,” mentioned Craig Ickler, Vitality Democracy Organiser at Cleveland Owns, an financial democracy incubator that builds cooperative companies and leads campaigns for neighborhood management of sources. “These ESG insurance policies that BlackRock promotes keep the identical energy constructions, the identical individuals who acquired us into this local weather mess,” he informed Voxeurop. “Maintaining them on the wheel and asking them to emit much less carbon won’t work. We couldn’t stand by seeing a false resolution like this to the local weather disaster taking place in our neighborhood. And [we] could not let the narrative be solely that. These top-down options are applied by funding bankers who dwell tons of or 1000’s of miles away, and management the right way to run our communities.”
And that is how Cleveland Owns, along with different native organisations, rented a room in the identical convention centre concurrently BlackRock’s keynote speech. “A various group of parents from the convention began displaying up at our occasion. It was good to have them with us and listen to an alternative choice to what BlackRock was speaking about,” Ickler defined. Their dialogue centered on the town’s issues and actual sources of change: “We didn’t simply present the issue with ESG finance, but in addition mentioned the concrete different.”
Ickler defined that his organisation makes use of a consortium to democratically determine the right way to lend funds to sustainable, non-extractive native companies, a debt which they will solely begin paying off as soon as they start making a revenue. “We offer these funds to native communities who’ve been traditionally deprived, and we proceed to help their marketing strategy. And past the mortgage, we assist them with paperwork and help them with concepts.”
Throughout the conference centre, BlackRock, which via its subsidiaries has $6.3 billion in “inexperienced” investments on the planet’s most polluting firms, defined how buyers could make a sustainable influence. Its investments in these firms quantity to $3.8 billion via funds with sustainability labels, contributing to emitting 18 million tonnes of CO2*.
Neither the summit organisers nor BlackRock ever reached out to the native organisations for a dialogue, however Ickler mentioned their presence made an influence and contributed to a constructive change in considering, particularly with convention contributors becoming a member of their session. “They ultimately informed us that our initiative [had] modified their perspective on the remainder of the convention; viewing the issue via completely different lenses, that means that there’s one other means this will occur; desirous about this after they’re watching these large banks and different large establishments, and begin asking, the place is the neighborhood voice?” concludes Craig Ickler.
*Information from the final quarter of 2023, extracted from the London Inventory Alternate Group (LSEG).
Stefano Valentino is a Bertha Problem Fellow 2024. This text is a part of an investigation coordinated by Voxeurop with the help of the Bertha Problem fellowship. Alef Ferreira Lopez, knowledge evaluation assistant, PhD scholar in Economics, Universidade Federal de Minas Gerais, contributed to the info evaluation.
