March 1, 2024

Millions in “climate-friendly” investments granted to fossil fuel giants, investigation reveals

See how fossil fuel companies raise “climate-friendly” funds.


Millions of euros in “climate-friendly” investments were allocated to the main carbon emitters, new research reveals.

Fossil fuel giants BP, Chevron, Eni, Exxon, Repsol, Shell and Total Energies were among the benefactors, according to Voxeurop.

The investigation examined green funds promoted by Eurizon Capital SGR, an asset management company controlled by Intesa San Paolo, Italy’s largest bank.

Eurizon is one of several financial players across Europe using misleading phrases and loopholes in the EU regulatory framework to sell supposedly “green” financial products that in fact finance major polluters.

“Green” investments are not always sustainable

Europe is the world leader in the market for so-called “green” investments. However, as Voxeurop’s investigation reveals, these investments are often neither sustainable nor responsible.

By exploiting ambiguous regulations and obscure terminology, some of them are actually financing fossil fuel companies.

Voxeurop analyzed four callssustainable‘ funds offered by Eurizon. The asset management company is one of many financial institutions offering “green” products in Europe, managing client assets worth €381 billion.

In 2022, Eurizon bought shares in the seven fossil fuel companies for a value of more than 208 million euros and placed them in portfolios it called “sustainable and sustainable”. responsible investments‘.

According to data from financial market analyst Refinitiv, as of April 2023, a total of $8.2 billion (€7.6 billion) in funds classified as green under EU rules have been allocated to companies of fossil energy by Eurizon.

Large fossil fuel companies supported by Eurizon are involved in 195 oil and gas megaprojects This alone would be able to exhaust the remaining 1.5°C carbon budget allowed by the Paris Climate Agreement.

How do fossil fuel companies obtain green financing?

Repsol and other fossil fuel companies “are interested in entering ‘green’ funds because this way they will receive more financing”, explains Fabio Moliterni, a specialist in the ethics department finance company Ética SGR.

By attracting investors through ambiguous language, these falsely sustainable funds managed to outperform their market. They guaranteed high returns by tracking indices completely devoid of sustainability goals.

“The European Commission’s rules leave investors room for maneuver when determining their sustainability objectives,” says Moliterni. “This makes it easier for the market to adapt flexibly to changes in the asset management regulatory landscape and thus enable product differentiation.

“But that doesn’t seem to stop greenwashing. In fact, many funds still manage to pursue strategies that are not aligned with the Commission’s sustainability objectives and instead prioritize returns, with little or no attention to environmental and social impact.”

Alessandro Messina, impact finance and sustainability expert at independent sustainable development company Avanzi, adds that “fund managers try to comply with EU regulations as much as possible, but if they have a profitable product on the market, they don’t try very hard. to force the rules.”

Eurizon’s pre-contractual prospectus even presented the funds in question as “sustainable and responsible investments”. This is despite not meeting the criteria set out in the EU regulatory framework.

How is sustainable finance regulated?

O European Sustainability Reporting Regulation for the Financial Services Sectorwhich came into force in 2021, imposes transparency criteria that financial advisors must comply with in pre-contractual documents and green investments.

Investors should be guided towards investments that can be classified by the manager as two shades of “green” (corresponding in the regulations to articles 8 and 9) or as “grey”, i.e. without sustainable claims (article 6th).


‘Light green’ products meet the criteria listed in article 8 and must promote “environmental and/or social characteristics”. But there is no clear definition of these characteristics.

This loophole allows managers to classify their funds as light green according to their own principles or according to ratings agencies’ assessments – even if the funds contain environmentally harmful companies.

The European Securities and Markets Authority (ESMA) simply states that light green funds have a lower sustainability ambition than “dark green” funds. The latter must aim for 100 percent sustainable investment, which means they must not cause significant damage to the environment or must promote the reduction of carbon emissions.

Light Green vs Dark Green Backgrounds

The difference between the two terms – products that “promote environmental characteristics” (light green) and “sustainable products” (dark green) – may seem marginal to an inexperienced investor. But the distinction is clear from a regulatory perspective.

Dark green funds must meet much stricter criteria. This is why they are more attractive to conscientious investors, but less so to fund managers who would incur greater burdens in complying with regulations.


The EU regulation is entirely based on transparency. Managers can therefore choose how to classify funds – whether gray, light green or dark green.

from ESMA technical standardsadopted on 1 January 2023, it increased the transparency burden for “dark green” products to such an extent that it triggered a significant migration to the “light green” classification.

These reclassified funds reached a value of 175 billion euros in 2023, according to a report to study by the financial consulting and analysis company Morningstar.

What are the criteria for dark green backgrounds?

For all dark green sustainable investments, fund managers must provide detailed metrics, data, methodologies and information on 14 indicators prescribed by EU regulations, called ‘Main Adverse Impacts’ (PAI).

These indicators include portfolio companies’ greenhouse gas emissions (direct, indirect and total) and the presence of fossil fuel companies in the investment.


However, sustainable fund managers can still get away with it big polluters in their portfolios.

Firstly, thanks to the flexibility offered by Article 8, fund managers can independently define the criteria by which they consider a fund to promote “environmental and/or social characteristics” (light green).

Secondly, by exploring the ambiguities in the meaning of words For the unwary investor, many managers choose to market funds that do not meet Article 9 criteria as “sustainable and responsible”.

Eurizon labeled fossil fuel funds as ‘light green’

In your management reportEurizon defines its funds as “light green”, despite investing in fossil fuel extraction companies.

Promoting sustainability section – where the social and environmental characteristics of the product must be described – is left blank, although this information is required by ESMA standards.


For more than three years, Eurizon has labeled certain funds as dark green, i.e. as fully sustainable and responsible, in pre-contractual documents made available to investors. The company only corrected the language after Voxeurop contacted it for this investigation.

Eurizon not only admits that it only takes into account six of the 14 indicators provided by the EU for the assessment of sustainable investments, but also in its periodic reports disclosure on promoting environmental, social and corporate governance (ESG), limited himself to mentioning them, rather than detailing the information required by EU regulations.

Lack of compliance and oversight for green funds

The EU regulation, in fact, provides a detailed description table in which managers must include metrics, periods considered for the calculation, explanation of the methodology and forecasts for subsequent periods.

These criteria must transparently identify and quantify any negative environmental and social impacts of the proposed investment.

This information is essential for investors to assess whether the product is sufficiently sustainable before placing their investment. money into it.


“The manager can declare what he wants, but then he has to document what the adverse impacts are according to the metrics”, comments Franco Moliterni from Etica SGR.

However, Eurizon limited itself to providing the documents mentioned in the regulations, but without including the data.

“This seems to me to be a compliance and enforcement issue,” says Messina. “You cannot qualify a investment as sustainable if it is Article 8. You can qualify it as “Attention to the Elements of Sustainability”: that is the difference that the regulations make.

“Evidently there is someone who was either very clever or doesn’t really know what they are talking about.”

Questioned by Voxeurop in May 2023 about this inconsistency, Eurizon said that the sustainable investment qualification “will be removed at the first useful opportunity to update the offer documentation, already scheduled for next July”.


On August 4, 2023, Eurizon Updated its key information document, eliminating the words “sustainable and responsible fund”, as promised. The update took place three years and six months after the green financing regulation came into force.

Voxeurop’s investigation was conducted with the support of Journalismfund Europe.

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