Climate funds often fall short of Paris goals, says report

Climate funds often fall short of Paris goals, says report

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Funds marketed as “climate themed” often hold shares in large polluters including big oil companies, and many are inconsistent with the goals of the Paris agreement despite claiming to be “aligned” with it, according to analysis by think-tank InfluenceMap.

About 72 of the 130 climate-focused funds examined — which collectively hold more than $67bn in assets and are managed by leading investment houses including BlackRock and State Street Global Advisors — were found to be misaligned with the Paris agreement goal of limiting global warming to well below 2C.

Collectively, the 130 funds held $153m in fossil fuel production chain companies, according to the report published on Friday. Both a State Street “fossil fuel reserves free” fund and a BlackRock “fossil fuel screened” fund held shares in Marathon Petroleum and Phillips 66. Funds that more closely track broad stock market benchmarks would typically hold greater shares of their portfolios in such companies.

“It’s very hard for investors to be able to accurately ascertain whether funds that are branded [as climate-focused] are actually Paris aligned or not,” said InfluenceMap analyst Daan Van Acker. He noted the wide spectrum of