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Financial firms dropped terms like “ESG” (Environmental, Social and Governance) and “sustainable” from the names of hundreds of their funds in the year before new European Union rules to clamp down on greenwashing came into force in late May, new analysis shows.
The rules from the European Securities and Markets Authority (ESMA) say that funds with certain sustainability or environmental-related terms in their names cannot invest in companies that get more than a certain share of their revenue from coal, oil, gas or particularly polluting electricity generation.
Those funds now also have to show that 80% of their investments meet the ESG objectives referred to in their titles.
Before the new regulation was introduced, the fund managers that dropped environmental and other sustainability terms from the highest percentage of their fund names were State Street, UBS and Northern Trust, the analysis said. It estimates that around 674 funds have done this overall.
Alison Schultz, an analyst at the German campaign group Finanzwende who conducted the research, said fund managers had earlier betrayed investors’ trust by labelling their funds wrongly and misdirecting money that should have helped to advance the green transition towards supporting business as usual.
“Consumers bought the funds because they wanted to invest sustainably,” she said, adding that “renaming [them] instead of divesting undermines the credibility of a market that depends on financial products being what they claim to be”.
Many fund managers have replaced ESG terminology in the titles of their funds with alternative words like “screened”, “selection” or “committed”, according to research by Finanzwende, Urgewald and Facing Finance and a separate analysis from Morningstar Analytics, which sells research and information to investors.
For example, Invesco changed its “Sustainable Eurozone Equity Fund” into the “Transition Eurozone Equity Fund” in March. Fund documents show that in April 2025 it had investments in Italy’s Enel and Germany’s E.ON, two utilities that sell gas and fossil-fuel electricity.
“Screened” and “transition” funds
Funds with words like “screened” or “transition” in their name can continue to invest as much as they want in oil, gas and coal businesses under the new EU regulations. Hortense Bioy, head of sustainable investing research at Morningstar, told Climate Home the use of words like this suggests fund managers “are still keen to offer products that signal ESG characteristics in the name”.
According to earlier research on the same topic released in March by Urgewald and Facing Finance, more than half of the funds that have dropped environmental-related terms from their names held shares in large fossil fuel companies – with the investments worth around €14bn ($16bn). The name changes mean that they can keep those investments.
While some have gone down this path, Morningstar analysis suggests others have done the opposite – ditching fossil fuels investments and keeping their green names. Leading global fund managers like US-based BlackRock, the world’s largest asset manager, have taken a varied approach across their portfolios.
An email BlackRock sent to clients on March 18, which it shared with Climate Home, said it had responded to the ESMA naming guidelines by changing the names of 56 funds worth $51bn to drop sustainability terms. An example it gave was dropping “ESG” from the BSF Systematic ESG World Equity Fund.
On the other hand, the email said it had kept the ESG names of another 60 funds worth $92bn, “enhancing the sustainable characteristics”.
Funds drop Total, Galp and Eni
Morningstar found that ESG funds which did not rebrand themselves as less green were investing less in fossil fuel companies like TotalEnergies, Galp and Eni in March this year compared to May 2024.
“It is fair to assume that part of the decline can be attributed to stock divestments made to comply with the ESMA guidelines,” their analysis said.
While State Street renamed the highest percentage of these funds, other firms – like BlackRock and Amundi – have lots of sustainability-related funds that were grouped under broad EU green financial disclosure categories but never had these now-regulated terms in their names.
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Last July, Climate Home revealed that EU-based funds like Blackrock’s, which claimed to be environmentally friendly, held shares worth at least $65 million in major coal companies. Under the new rules, they can continue as long as they don’t have “environmental” or “sustainable” terms in their name.
While funds with what the ESMA calls environmental, impact or sustainability related terms cannot invest in companies with fossil fuel revenues above a certain threshold (see chart above), funds with transition-related terms still can. These words include “transition”, “improve”, “progress”, “evolution”, “transformation” and “net zero”.
BlackRock also said it had either changed the names or investment methodologies of 18 funds worth $42bn for a “clearer alignment to transition” in response to the new rules.
Investors notified
Fund managers are required to notify investors of the name changes, usually in prospectuses sent to professional investment managers.
Bioy of Morningstar said she had seen many of these notifications and, in some of them, fund managers told investors they were lowering their sustainable investment allocations. “Some of them are not as ESG as they used to be,” she said. “They’ve become almost like traditional funds.”
But she said that firms that have renamed their funds cannot necessarily be accused of greenwashing before because there were “no rules” over what terms like ESG and sustainable meant. Investors now need to be educated on what these terms legally mean according to the new rules, she added.
The rules only affect funds marketed in EU countries but, according to Bioy, that is the vast majority of the world’s funds that make green claims, even though they make up a small proportion of the total.
Asked to comment, a BlackRock spokesperson told Climate Home the investment objectives of its funds “are clearly disclosed in each fund’s prospectus and on BlackRock’s website”.
Funds “are managed in line with applicable regulations governing sustainable investing”, they said, adding that “for investors that have decarbonization investment objectives we offer a range of products that provide such exposure”.
At the time of publication, State Street, UBS, Northern Trust and Invesco had not responded to requests for comment.
The post As EU acts to stop greenwash, funds drop climate claims from their names appeared first on Climate Home News.
As EU acts to stop greenwash, funds drop climate claims from their names
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Prepared by a coalition of nine Western Australian union, industry, conservation, and community organisations—including UnionsWA, the Conservation Council WA, and the Smart Energy Council—the WA Clean Energy, Jobs & Industry Plan provides a practical roadmap to transform Western Australia into a clean energy powerhouse while creating thousands of secure local jobs.
Western Australia stands at a pivotal crossroads: lead the global clean energy economy or watch investment, future industries, and secure jobs go elsewhere. The WA Clean Energy, Jobs & Industry Plan outlines a transformative blueprint to harness the state’s world-class solar and wind resources. Discover how legislated renewable targets, green iron manufacturing, and a dedicated regional training strategy can generate tens of thousands of local jobs, lower household bills, and build a resilient, net-zero future for all Western Australians.
WA needs a clear and forward-thinking plan if it is going to become a competitive renewable energy powerhouse and maintain its economic strength through the energy transition.
“Western Australians know a faster renewable energy transition will lower their household expenses and prevent harmful climate pollution. But the community also needs clear direction to ensure this transition will create jobs, lower costs and not cause undue environmental harm.
“Here, sectors representing a broad range of interests have laid the groundwork for those outcomes, clearly outlining what is needed to create a future for WA that is good for the environment, for the climate, for workers and for the economy.
Summary
The WA Clean Energy, Jobs & Industry Plan sets out a strategic roadmap to position Western Australia as a global clean energy superpower while creating thousands of secure local jobs.
The report establishes three overarching goals:
- Creating local employment.
- Maintaining industrial competitiveness.
- Lowering household energy costs
To realize this vision, the framework details actionable measures to follow on from the recent WA Government announcement of a 75% Renewable Energy Target by 2031 for the South West Interconnected System. This includes developing a statewide Renewable Energy Target, coordinating statewide workforce and training pipelines, strategically planning regional infrastructure to safeguard high-value biodiversity and cultural heritage, and ensuring equitable benefit-sharing through household electrification incentives and First Nations equity partnerships. Ultimately, the plan highlights that establishing clear policy and regulatory certainty will unlock lower energy bills, boost power reliability, and secure the state’s global competitiveness in emerging green commodity export markets.
Key Findings
- Statewide Renewable Energy Target and Emissions Reduction Targets: The report calls for a statewide RET and 1.5°C aligned emission reduction targets to remove policy risk, lower capital costs, and attract clean energy investment.
- Transformative Job Creation: Accelerating the transition offers massive employment prospects, including up to 8,800 solar and battery jobs by 2050, as well as 24,000 ongoing and 11,000 construction jobs in a commercial green iron industry.
- Industrial Electrification & Competitiveness: Requiring large gas users to adopt binding electrification timetables and providing concessional financing will protect existing energy-intensive manufacturers from rising energy costs and impending domestic gas shortfalls.
- Green Commodity Export Leadership: Western Australia can build new export markets in green iron, green ammonia, and offshore oil/gas decommissioning by constructing shared common-user infrastructure and setting dedicated Green Commodity Export Targets.
- Coordinated Workforce & Training Pipeline: To address critical skill shortages the plan recommends establishing a WA Clean Energy Jobs Plan 2050, three regional training hubs, and dedicated pathways for female and under-represented apprentices.
- Environmental Safeguards & Community Benefits: Fast-tracked development must be paired with State Planning Policies that avoid high-biodiversity and cultural heritage lands, mandate new data centres to run on additional renewable power, and deliver household electrification rebates and First Nations equity partnerships.
What you can do
WA has an opportunity to lead on sustainable, clean energy and associated industries. You can help by:
- Sending an email to Environment Minister Murray Watt and Prime Minister Anthony Albanese, calling on them to reject Browse.
- Sharing this story to help more Australians understand what’s at stake.
- Encouraging your friends and family to take action.
Countries have completed the first “global review” of their progress towards reversing nature loss by 2030 at the COP17 biodiversity talks in Yerevan, Armenia.
The review “notes with deep concern” that, unless action is “rapidly accelerated”, the goal to reverse nature loss and meet a set of 23 targets by 2030 “will not be achieved”.
It “urges” countries to accelerate action, including by “increased ambition in addressing the gaps”.
Much of the discussions in Yerevan focused on how to raise the necessary funds to help developing countries protect nature.
Some major economies pushed to expand the range of nations that are expected to provide finance, with countries agreeing at the end of the two weeks of talks that non-donors that want to contribute can “signal interest” before COP18.
This came after developed countries failed to meet a target to significantly ramp up nature finance over the last few years.
It also came as a landmark fund agreed at COP16 in Colombia to pay communities for the genetic resources derived from nature stands nearly empty two years on.
The Yerevan talks marked the halfway point of the “Kunming-Montreal Global Biodiversity Framework” (GBF), the “Paris Agreement for nature” first made in 2022 and due to be achieved by 2030.
During the nearly 12-hour-long final plenary, countries voted for Quito, Ecuador, to host the COP18 nature talks, which will be held in 2028.
Countries managed to sign off on all the major negotiation texts, marking a stark contrast to COP16, which ran so far over time that the Colombian presidency lost “quorum”, forcing talks to resume in Rome months later.
Below, Carbon Brief has detailed analysis of all of the key outcomes from COP17.
Formal negotiations
Finance
Finance, predictably, was at the heart of the discord and deadlock at the Yerevan talks.
At COP17, discussions on finance had to achieve several outcomes.
The first part – to take stock of biodiversity finance mobilised so far to meet the nature deal’s goals – fell under the global review.
As the global report noted, developed countries failed to meet their commitments to raise “at least $20bn a year by 2025” for nature. Delegates pointed to falling aid levels and a sharp 27% decline in environmental funding for the 2026-30 period.
The second part was to agree on how to mobilise resources for the next four years, to meet the GBF’s goals and targets.
Calls to “broaden the contributor base” of who pays to protect nature – and whether that should include emerging economies – became the most fraught element of the talks.
Eventually, countries agreed on what Switzerland described as a “super, mega-delicate” text. It hinged on major “political compromises”, with “no major winner or loser”, according to Kenya.
Per the decision, countries that want to be included on a list of developed country donors can “signal interest” through bilateral, confidential consultations before COP18 and every alternate COP after.
Finally, countries also agreed on criteria to shape and resource a new, permanent financial mechanism to protect nature after 2030.
However, this did not immediately take the form of a new fund under the COP that biodiverse countries have demanded since 2022, deferring the mechanism’s institutional structure to COP18.
Resource mobilisation discussions at the GBF’s halfway mark were supposed to agree on how to close the “biodiversity finance gap” and to “increase resources from all sources” to “at least” $200bn per year by 2030, as set out in target 19 of the GBF.
The talks were largely dominated by a push, led by the JUSCANZ bloc of developed countries, to “broaden the contributor base”. This could see emerging economies, such as Qatar, China, Saudi Arabia and India, being added to the list of countries that pay to protect nature.