A joint investigation by Voxeurop and the Guardian has exposed that dozens of European funds, marketed under the EU’s Sustainable Finance Disclosure Regulation (SFDR) Articles 8 and 9, maintain substantial equity in the world’s leading oil and gas firms. In total, these “environmentally oriented” portfolios own $33.5 billion-worth of stakes in 37 publicly traded fossil-fuel companies.
More than $18 billion of the funds’ investments are concentrated in the five largest corporate emitters TotalEnergies, Shell, ExxonMobil, Chevron and BP each flagged in the 2023 Carbon Majors report. Other high-emission holdings include U.S. fracking giant Devon Energy and Suncor, operator of Canadian tar sands projects.
Fund managers defend these positions by arguing that shareholder engagement is the best route to force oil majors toward climate-aligned strategies. Yet a recent Carbon Tracker study found that none of these companies has a business plan consistent with the Paris Agreement’s goals and several have even weakened their emissions targets over the past year.
Transport & Environment’s sustainable finance manager Giorgia Ranzato called the practice “diabolical greenwashing,” noting: “A fund branding itself as green should draw a clear line at fossil fuels.” Reclaim Finance’s Paul Schreiber added that only an explicit ban on such investments within SFDR-labelled funds will restore trust in Europe’s sustainable investing framework.
Which Asset Managers Are Most Exposed?
The European Securities and Markets Authority (ESMA) published stricter naming guidelines in August 2024 effective 21 May 2025 requiring funds to prove a “clear and measurable path” toward environmental objectives if they use terms like “sustainable,” “ESG,” or “transition.” Though non-binding, these rules empower national regulators to demand greater transparency and potentially sanction misleading fund names.
Several major managers, including BlackRock and JPMorgan, have begun stripping “sustainable” and “ESG” from certain fund titles in anticipation of the new code. Campaigners argue that the SFDR itself must be revised to categorically exclude fossil-fuel companies from any fund claiming green credentials, ensuring that Europe’s sustainable investing truly supports the energy transition.
