More than half of Dutch investment funds that market themselves as sustainable also invest in companies that profit from fossil fuels. This conclusion comes from a European research collective led by Follow the Money (FTM). Together with other journalistic organizations, FTM investigated 1,300 sustainable investment funds. These funds often have names featuring words like sustainable, green, ESG (Environmental, Social, and Governance), or similar terms.
Green Funds
Investment funds allow people with some extra money to invest broadly and easily. The fund manager distributes the money across dozens or hundreds of investments, meaning you are essentially investing in numerous companies at once.
Many of these funds nowadays claim to be sustainable. As a customer or investor, you would expect your money to be used to invest in a more climate-friendly world. However, the research reveals that these funds frequently invest in fossil fuel companies as well.
50 Percent
According to FTM, more than half of the Dutch ‘sustainable’ funds also invest in fossil fuels. This is higher than the European average, which stands at about 40 percent. In the Netherlands, more than a hundred investment funds claim to be sustainable but actually invest in coal, oil, or gas. These fossil investments contradict new guidelines from ESMA, the European Securities and Markets Authority. Although these guidelines are not yet in force, they are expected to come into effect later this year.
The funds examined invest in oil and gas companies, geological surveyors for the oil and gas industry, and pipeline constructors. In the Netherlands, this includes funds from ABN Amro, Cardano, and ASR, the researchers conclude.
Compliance with Regulations
ABN AMRO told the ANP news agency that all its investment products currently comply with 'relevant existing legislation'. The bank also said it would ensure 'that our products comply with the new regulations once they take effect'. ASR plans to review by the end of this year whether its investment products sufficiently align with environmental regulations.
Deception
The Dutch Investors' Association (VEB) believes that providers of investment funds should better inform their customers. "The reality for the providers of these products and that for investors is different. That is quite undesirable. If someone does not understand what you are offering, you need to explain it better," said VEB spokesperson Joost Schmetz.
"If you present yourself as a sustainable fund and you invest heavily in companies that are clearly not sustainable, you can be said to be deceiving people," he continued.
Sources: RTL Nieuws, IEX, translation by ChatGPT
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