• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 7 days America should go after China but it should be done in a wise way.
  • 23 hours Even Shell Agrees with Climate Change!
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Offshore Oil Discoveries Thrive

Offshore Oil Discoveries Thrive

But despite the industry as…

ESG Funds With $5 Trillion in Assets Boost Exposure to Oil and Gas

Funds promoting ESG goals – the world’s biggest class of ESG funds with an estimated $5 trillion in assets – have raised their exposure to the oil and gas industry over the past two and a half years, according to data from Morningstar cited by Bloomberg.

The EU introduced the so-called Sustainable Finance Disclosure Regulation (SFDR) in 2021, in which it defines Article 8 products as those that promote environmental or social characteristics and which integrate sustainability into the investment process.    

Article 8 funds are estimated to have around $5 trillion in client assets, per Morningstar data quoted by Bloomberg.

These so-called Article 8 funds, registered as “promoting” ESG goals, had 2.3% of their portfolios in oil and gas assets at the end of the third quarter of 2023, compared to just 1.4% when the EU introduced the SFDR investing framework two and a half years ago, the data from Morningstar showed. The same funds lowered their holdings in renewable energy assets to 0.3% of all holdings compared to 0.4% in early 2021.

In the Q3 2023 review of SFDR Article 8 and Article 9 funds, Morningstar said that “Amid persistent macroeconomic pressures, including high interest rates and slowdown in some of the largest economies, investors continued to pull money from Article 8 funds as these registered outflows of EUR 20.5 billion in the third quarter of 2023.”

At the same time, inflows into Article 9 products – those funds that have sustainable investment as their objective – slipped “to the lowest level of subscriptions for Article 9 funds since the introduction of SFDR,” Morningstar said.

In October, data from Morningstar showed that over the past year, investors have withdrawn a total of $14.2 billion from U.S. sustainable funds.

“Although the motivations behind outflows cannot be perfectly quantified, many factors are in play. These include rising energy prices, high interest rates, concerns about greenwashing, and political backlash,” Alyssa Stankiewicz, an associate director of sustainability research for Morningstar, wrote in an analysis.  


By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News