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
Climate Change
Pacific nations want higher emissions charges if shipping talks reopen
Seven Pacific island nations say they will demand heftier levies on global shipping emissions if opponents of a green deal for the industry succeed in reopening negotiations on the stalled accord.
The United States and Saudi Arabia persuaded countries not to grant final approval to the International Maritime Organization’s Net-Zero Framework (NZF) in October and they are now leading a drive for changes to the deal.
In a joint submission seen by Climate Home News, the seven climate-vulnerable Pacific countries said the framework was already a “fragile compromise”, and vowed to push for a universal levy on all ship emissions, as well as higher fees . The deal currently stipulates that fees will be charged when a vessel’s emissions exceed a certain level.
“For many countries, the NZF represents the absolute limit of what they can accept,” said the unpublished submission by Fiji, Kiribati, Vanuatu, Nauru, Palau, Tuvalu and the Solomon Islands.
The countries said a universal levy and higher charges on shipping would raise more funds to enable a “just and equitable transition leaving no country behind”. They added, however, that “despite its many shortcomings”, the framework should be adopted later this year.
US allies want exemption for ‘transition fuels’
The previous attempt to adopt the framework failed after governments narrowly voted to postpone it by a year. Ahead of the vote, the US threatened governments and their officials with sanctions, tariffs and visa restrictions – and President Donald Trump called the framework a “Green New Scam Tax on Shipping”.
Since then, Liberia – an African nation with a major low-tax shipping registry headquartered in the US state of Virginia – has proposed a new measure under which, rather than staying fixed under the NZF, ships’ emissions intensity targets change depending on “demonstrated uptake” of both “low-carbon and zero-carbon fuels”.
The proposal places stringent conditions on what fuels are taken into consideration when setting these targets, stressing that the low- and zero-carbon fuels should be “scalable”, not cost more than 15% more than standard marine fuels and should be available at “sufficient ports worldwide”.
This proposal would not “penalise transitional fuels” like natural gas and biofuels, they said. In the last decade, the US has built a host of large liquefied natural gas (LNG) export terminals, which the Trump administration is lobbying other countries to purchase from.
The draft motion, seen by Climate Home News, was co-sponsored by US ally Argentina and also by Panama, a shipping hub whose canal the US has threatened to annex. Both countries voted with the US to postpone the last vote on adopting the framework.
The IMO’s Panamanian head Arsenio Dominguez told reporters in January that changes to the framework were now possible.
“It is clear from what happened last year that we need to look into the concerns that have been expressed [and] … make sure that they are somehow addressed within the framework,” he said.
Patchwork of levies
While the European Union pushed firmly for the framework’s adoption, two of its shipping-reliant member states – Greece and Cyprus – abstained in October’s vote.
After a meeting between the Greek shipping minister and Saudi Arabia’s energy minister in January, Greece said a “common position” united Greece, Saudi Arabia and the US on the framework.
If the NZF or a similar instrument is not adopted, the IMO has warned that there will be a patchwork of differing regional levies on pollution – like the EU’s emissions trading system for ships visiting its ports – which will be complicated and expensive to comply with.
This would mean that only countries with their own levies and with lots of ships visiting their ports would raise funds, making it harder for other nations to fund green investments in their ports, seafarers and shipping companies. In contrast, under the NZF, revenues would be disbursed by the IMO to all nations based on set criteria.
Anais Rios, shipping policy officer from green campaign group Seas At Risk, told Climate Home News the proposal by the Pacific nations for a levy on all shipping emissions – not just those above a certain threshold – was “the most credible way to meet the IMO’s climate goals”.
“With geopolitics reframing climate policy, asking the IMO to reopen the discussion on the universal levy is the only way to decarbonise shipping whilst bringing revenue to manage impacts fairly,” Rios said.
“It is […] far stronger than the Net-Zero Framework that is currently on offer.”
The post Pacific nations want higher emissions charges if shipping talks reopen appeared first on Climate Home News.
Pacific nations want higher emissions charges if shipping talks reopen
Climate Change
Doubts over European SAF rules threaten cleaner aviation hopes, investors warn
Doubts over whether governments will maintain ambitious targets on boosting the use of sustainable aviation fuel (SAF) are a threat to the industry’s growth and play into the hands of fossil fuel companies, investors warned this week.
Several executives from airlines and oil firms have forecast recently that SAF requirements in the European Union, United Kingdom and elsewhere will be eased or scrapped altogether, potentially upending the aviation industry’s main policy to shrink air travel’s growing carbon footprint.
Such speculation poses a “fundamental threat” to the SAF industry, which mainly produces an alternative to traditional kerosene jet fuel using organic feedstocks such as used cooking oil (UCO), Thomas Engelmann, head of energy transition at German investment manager KGAL, told the Sustainable Aviation Fuel Investor conference in London.
He said fossil fuel firms would be the only winners from questions about compulsory SAF blending requirements.
The EU and the UK introduced the world’s first SAF mandates in January 2025, requiring fuel suppliers to blend at least 2% SAF with fossil fuel kerosene. The blending requirement will gradually increase to reach 32% in the EU and 22% in the UK by 2040.
Another case of diluted green rules?
Speaking at the World Economic Forum in Davos in January, CEO of French oil and gas company TotalEnergies Patrick Pouyanné said he would bet “that what happened to the car regulation will happen to the SAF regulation in Europe”.
The EU watered down green rules for car-makers in March 2025 after lobbying from car companies, Germany and Italy.
“You will see. Today all the airline companies are fighting [against the EU’s 2030 SAF target of 6%],” Pouyanne said, even though it’s “easy to reach to be honest”.
While most European airline lobbies publicly support the mandates, Ryanair Group CEO Michael O’Leary said last year that the SAF is “nonsense” and is “gradually dying a death, which is what it deserves to do”.
EU and UK stand by SAF targets
But the EU and the British government have disputed that. EU transport commissioner Apostolos Tzitzikostas said in November that the EU’s targets are “stable”, warning that “investment decisions and construction must start by 2027, or we will miss the 2030 targets”.
UK aviation minister Keir Mather told this week’s investor event that meeting the country’s SAF blending requirement of 10% by 2030 was “ambitious but, with the right investment, the right innovation and the right outlook, it is absolutely within our reach”.
“We need to go further and we need to go faster,” Mather said.

SAF investors and developers said such certainty on SAF mandates from policymakers was key to drawing the necessary investment to ramp up production of the greener fuel, which needs to scale up in order to bring down high production costs. Currently, SAF is between two and seven times more expensive than traditional jet fuel.
Urbano Perez, global clean molecules lead at Spanish bank Santander, said banks will not invest if there is a perceived regulatory risk.
David Scott, chair of Australian SAF producer Jet Zero Australia, said developing SAF was already challenging due to the risks of “pretty new” technology requiring high capital expenditure.
“That’s a scary model with a volatile political environment, so mandate questioning creates this problem on steroids”, Scott said.
Others played down the risk. Glenn Morgan, partner at investment and advisory firm SkiesFifty, said “policy is always a risk”, adding that traditional oil-based jet fuel could also lose subsidies.


Asian countries join SAF mandate adopters
In Asia, Singapore, South Korea, Thailand and Japan have recently adopted SAF mandates, and Matti Lievonen, CEO of Asia-based SAF producer EcoCeres, predicted that China, Indonesia and Hong Kong would follow suit.
David Fisken, investment director at the Australian Trade and Investment Commission, said the Australian government, which does not have a mandate, was watching to see how the EU and UK’s requirements played out.
The US does not have a SAF mandate and under President Donald Trump the government has slashed tax credits available for SAF producers from $1.75 a gallon to $1.
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SAF and energy security
SAF’s potential role in boosting energy security was a major theme of this week’s discussions as geopolitical tensions push the issue to the fore.
Marcella Franchi, chief commercial officer for SAF at France’s Haffner Energy, said the Canadian government, which has “very unsettling neighbours at the moment”, was looking to produce SAF to protect its energy security, especially as it has ample supplies of biomass to use as potential feedstock.
Similarly, German weapons manufacturer Rheinmetall said last year it was working on plans that would enable European armed forces to produce their own synthetic, carbon-neutral fuel “locally and independently of global fossil fuel supply chain”.
Scott said Australia needs SAF to improve its fuel security, as it imports almost 99% of its liquid fuels.
He added that support for Australian SAF production is bipartisan, in part because it appeals to those more concerned about energy security than tackling climate change.
The post Doubts over European SAF rules threaten cleaner aviation hopes, investors warn appeared first on Climate Home News.
Doubts over European SAF rules threaten cleaner aviation hopes, investors warn
Climate Change
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