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Monday 6 February 2023 Dublin: 5°C
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'Sustainable' investment funds in Ireland hold over $3 billion in fossil fuels
An investigation across Europe found 388 ‘sustainable’ funds that invest in fossil fuel and aviation companies.

INVESTMENT FUNDS IN Ireland that declared themselves to be sustainable collectively hold more than $3 billion worth of investments in the fossil fuel and aviation industries, an investigation has found.

A joint ‘Great Green Investment Investigation’ by Investico, Follow the Money and nine European media organisations found shares in the fossil fuel industry held by ‘sustainable’ funds from providers such as Actiam, BlackRock and BNP Paribas.

Of 838 funds across Europe that have classified themselves as the highest category of sustainability under an EU system, 388 invest in aviation and fossil fuel companies.

Under the EU’s Sustainable Finance Disclosure Regulation, funds must classify their sustainability level into one of several categories known as grey, light green, or dark green.

Dark green funds are classified as the most sustainable type of investment and are supposed to be working towards specific environmental or social goals in addition to not inflicting any significant harm.

However, the investigation found that 46.3% of 838 dark green funds had invested in fossil fuels or aviation.

Airlines EasyJet and Lufthansa are the subjects of investment by supposedly green funds, as well as US energy company NextEra Energy, French petroleum supermajor TotalEnergies, and the German coal company RWE.

In Ireland, data from the investigation shared with The Journal show that the value of investments in fossil fuels and aviation by ‘dark green’ funds was $3.205 billion, out of a total $137 billion.

The top ‘grey’ companies that were invested in by dark green funds include NextEra energy, a US energy company that generates electricity from renewable sources but also from gas, a fossil fuel, and Enel, an Italian gas and electricity distributor.

KKR & Co Inc, a US investment management company, received the third highest level of investment from dark green funds, followed by TotalEnergies SE, one of the world’s biggest oil companies, and the China Longyuan Power Group, which operates in wind power but also coal.

118 funds hold 579 investments in fossil fuels, including 512 investments in oil and gas and 224 in coal that add up to $3.1 billion.

Additionally, 45 funds hold 157 investments in the aviation industry worth $115 million.

The top funds investing the most in grey companies are BlackRock Global Funds New Energy Fund and Carmignac Investissement.

Those are followed by three funds operated by iShares (which itself is managed by BlackRock).

The European Securities and Markets Authority told investigators that “while there is not an explicit ban on fossil fuel investments as ‘sustainable investments’, it should be quite challenging to make such investments under sustainable investments due to the need to show that the investments do not harm any environmental or social objective”.

“It should indeed be quite difficult to argue that fossil fuel investments would respect [the principle of] do not significantly harm.”

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