‘Sustainable’ pension funds accused of greenwashing over billions held in oil and gas firms
People investing their pensions in funds that claim green credentials are being warned they may actually be backing the world’s largest oil and gas companies.
Carbon Tracker Initiative said that asset managers have invested $376bn (£295bn) in oil and gas companies, despite publicly pledging to back efforts to limit global temperature rises to 1.5C. The environmental thinktank based in London and New York found that more than 160funds with a green label held $4.6bn in 15 companies including ExxonMobil, Chevron and TotalEnergies.
It also found that 25 members of the Net Zero Asset Managers initiative had invested in those companies and some had increased their holdings in 2022. NZAM said its international initiative started two years ago and investors needed time to change their strategies.
The warning comes as the UK’s Financial Conduct Authority prepares to publish anti-greenwashing rules that are intended to clean up how investment funds are labelled.
Just under 50% of all UK employees now pay into employer schemes or private pensions where they can make a choice about how their money is invested – a huge rise since 2012 when employers became legally obliged to automatically enrol workers in a workplace scheme. Most people with a private pension or a stocks and shares ISA make a choice as to how their money is invested and many emphasise sustainability.
The financial industry has reacted by creating funds badged as sustainable, climate, carbon, transition or ESG – short for environmental, social and governance.
“What we found is that these funds, despite their names, can often include sometimes large positions in fossil fuel companies,” said Maeve O’Connor, one of the report’s authors, and an analyst at the Carbon Tracker
Read more on theguardian.com
