ClientEarth has filed a complaint against BlackRock with France’s financial regulator, the Autorité des marchés financiers (AMF).
According to ESG News, the complaint accuses BlackRock of greenwashing by misleading investors with funds labelled as “sustainable,” despite investing over $1 billion in major fossil fuel companies like Shell, BP, and Chevron. These companies are noted for their ongoing expansion into fossil fuel projects, which contradicts the sustainable label touted by BlackRock.
Megan Clay, a lawyer at ClientEarth, expressed concern over the issue, stating, “Through BlackRock’s so-called ‘sustainable’ funds, investors are unwittingly being exposed to billions in fossil fuel investments, distorting competition in the market for truly sustainable financial products.” This case marks the first legal action against a financial institution for greenwashing. It challenges the integrity of BlackRock’s sustainability claims, spotlighting the 18 retail investment funds in France that are allegedly mischaracterised.
Greenwashing is the practice of falsely promoting products or services as environmentally sustainable. In this context, BlackRock is accused of using the sustainability label while financially supporting industries that are detrimental to environmental goals. The legal action initiated by ClientEarth aims to redefine the true meaning of “sustainable” in financial product marketing and enhance transparency for investors.
Looking ahead, ClientEarth seeks to enforce stricter regulations on how investment funds are marketed and managed concerning their environmental claims. They also hope this case prompts other financial institutions to reassess their fund labels and for global regulators to increase scrutiny in this area. “We want other investment managers to heed this warning and for regulators worldwide to ensure sustainable funds are genuinely sustainable,” ClientEarth noted, signalling a potential shift towards more authentic sustainable finance practices.
The complaint, now with the AMF, could lead to investigations and possibly redefine marketing standards for sustainability in financial services, aiming to secure a more transparent and honest investment landscape.
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