In its first greenwashing complaint against a financial institution, ClientEarth has filed complaint against BlackRock for misleading marketing in France.

ClientEarth accuses BlackRock is greenwashing by calling investment funds 'sustainable' that it believes are not. Many of these “sustainable” funds have invested in fossil fuel companies, the vast majority of which are developing new projects or capacity. This includes the likes of TotalEnergies, Shell, BP, Chevron, Conoco Phillips and Equinor.

Building on analysis from French organisation Reclaim Finance, we identified 18 actively managed retail investment funds marketed in France with ‘sustainable’ in their names, which collectively hold more than US$1 billion of fossil fuel investment, the majority of which represents fossil fuel expansion. This is why we have filed the complaint to the French regulators.

With a portfolio of $9tr, BlackRock is the world’s largest asset management company, and ClientEarth will see this as a test case, with the action forcing a legal definition of what is actually meant by “sustainable” in investment fund marketing for the first time, and could set standard for investment funds when it comes to both fossil fuel financing and sustainable finance.

Megan Clay, a ClientEarth lawyer, said of a positive outcome: “Our analysis shows that through BlackRock’s so-called ‘sustainable’ funds, investors are unwittingly being exposed to investments worth billions in fossil fuel companies. Exaggerated sustainability claims create a competitive advantage for these BlackRock funds, distorting competition in the market and diverting capital flows away from genuinely sustainable products.”

ClientEarth has now filed a letter of complaint to the French financial regulator, the Autorité des marchés financiers (AMF) and will notifying the European financial regulator (ESMA) of the action.

---