Former BlackRock Executive Blows the Whistle on Greenwashing

Surprised to read this in Bloomberg:

With so much money flowing into securities deemed compatible with environmental, social and governance standards, the risk of asset managers disingenuously promoting their offerings as being ESG compliant is high and rising. Unfortunately, new European Union rules designed to delineate the industry’s performance will likely lead to more greenwashing, not less.

Last week, Tariq Fancy, the former chief investment officer for sustainable investing at BlackRock Inc., the world’s biggest asset manager overseeing $8.7 trillion, castigated the industry’s duplicity, in an article for USA Today:

“In truth, sustainable investing boils down to little more than marketing hype, PR spin and disingenuous promises from the investment community. Existing mutual funds are cynically rebranded as ‘green’ — with no discernible change to the fund itself or its underlying strategies — simply for the sake of appearances and marketing purposes.”

The numbers back him up. According to data compiled by Morningstar Inc., more than 250 existing European funds changed their investment objectives to adopt an ESG stance last year, with almost all of them rebranding to reflect the purported change. Color me skeptical: With ESG funds pulling in almost 100 billion euros ($120 billion) of new new money in the fourth quarter, which Morningstar reckons was 45% of total fund inflows, the temptation to stick an ESG badge on all funds is proving irresistible. 

Earlier this month, the EU introduced the Sustainable Finance Disclosure Regulation, a suite of rules aimed at policing how the fund management industry deals with the climate emergency. The aim is laudable; but the law of unintended consequences means the attempt at codification is likely to backfire.

The new rules basically create three classifications of European funds. One category — Article 9 in the taxonomy — is designed to encapsulate what are commonly called impact funds, where the objective is to proactively allocate capital to projects such as renewable energy or health care or clean water. Also dubbed “dark green” investments, these comprise the smallest and most intensive category of ESG products.

The second designation — Article 8 — covers the remaining “light green” ESG suite, or funds that have “environmental or social characteristics.” That would cover products that exclude some securities based on their environmental unfriendliness or other criteria deemed unacceptable.

The rest of the fund universe should fall into the Article 6 grade, designed to encompass investments that ignore any and all of the criteria that their ESG brethren take into account when deciding what to buy.

But there’s a problem. In the current investing climate, there’s absolutely no incentive for a salesforce to pitch an Article 6 fund to a customer. Asset allocation committees want to be seen doing the right thing, so any funds that are not explicitly ESG-friendly effectively become market pariahs. This creates a strong temptation to classify all funds under Article 8, even if they’re measured against non-ESG benchmarks and their securities selections don’t take such concerns into account.

David Czupryna, the Paris-based head of ESG development at Candriam, which manages about $143 billion in assets, says that the aim of the three-pronged classification, and the accompanying rules on mandatory disclosures, was to “dissuade would-be half-hearted ESG asset managers from emphasizing sustainability.” By setting a high enough bar for Article 8 and 9 funds, only truly sustainable portfolios would qualify. However, fear of missing out on the cash flowing into green funds can also incentivize playing fast and loose with the rules.

Fancy, the former BlackRock executive, argues that the marketing efforts of the asset management industry are “a placebo” for addressing the climate crisis and shouldn’t replacegovernment action. “A ‘free market’ will not correct itself or fix the problem by its own accord,” he wrote. 

It would be a shame if the EU’s genuine attempt to impose some order on the green funds landscape, which is currently a bit of a Wild West,backfires. But as Huw van Steenis, the chairman of sustainable finance at UBS AG, wrote for Bloomberg Opinion last week, the bloc’s methodology is both too strict and too broad, excluding some investments that should be deemed green as well as firms that are becoming more carbon neutral.

Given that every asset manager claims to have ESG at the heart of their investment process these days, they can claim to qualify as Article 8 under the new taxonomy. People seeking to do no harm with their cash will need to be even more vigilant in ensuring their funds are really as green as they say they are.

Post #4 – Great Reset/Agenda 2030 – Modern Globalist People and Entities – KPMG

KPMG is known as one of the “Big Four” global accounting firms. From their website:

“Through helping other organizations mitigate risks and grasp opportunities, we can drive positive, sustainable change for clients, our people and society at large.

KPMG firms operate in 146 countries and territories, and in FY20, collectively employed close to 227,000 people, serving the needs of business, governments, public-sector agencies, not-for-profits and through KPMG firms’ audit and assurance practices, the capital markets. KPMG is committed to quality and service excellence in all that we do, bringing our best to clients and earning the public’s trust through our actions and behaviours both professionally and personally.

We lead with a commitment to quality and integrity across the KPMG global organization, bringing a passion for client success and a purpose to serve and improve the communities in which KPMG firms operate. In a world where rapid change and unprecedented disruption are the new normal, we inspire confidence and empower change in all we do.”

What alarms me about KPMG, not only are they onboard with the Great Reset, but they have been behind Sustainable Development Goals since 2014 – as evidenced by this document:

Of course, it was not until 2015 that the United Nations unveiled Agenda 2030, which made public the “17 Sustainable Development Goals” . So KPMG is deep in this shit. I love their new “Our Impact Plan” which is a nice amalgamation of globalist/Great Reset/hell on earth key words like:

  • Sustainability
  • Decarbonization
  • Stakeholder Capitalism
  • People, Planet, Profits
  • Inclusion and Diversity
  • Net-Zero Carbon Emissions by 2030
  • Responsible Tax Program
  • Circular economy
  • Enhancing social inclusion and prosperity through education

This is one of the most revealing captions of their bullshit:

“Our Purpose and Values guide us and continue to shape our business, informing our actions and defining the work we do every day. To inspire confidence and empower change, we need to
consider the economic, environmental and social impact of our activities, align our financial and societal performance as part of a shift towards stakeholder capitalism, and ensure we have strong governance to oversee all our activities.


Our work with the World Economic Forum, setting the IBC metrics for ESG reporting, is one example of how we’re using our experience and knowledge to help shape the future of sustainable business. We are seeing this work as part of the wider role we believe we must play to get to harmonized, consistent
and credible information on sustainability matters — both risks to and impacts by companies. We have been pleased to accept roles at the International Integrated Reporting Council (IIRC), FSB Taskforce
on Climate-related Financial Disclosures (TCFD), Corporate Reporting Dialogue and Sustainability Accounting Standards Board (SASB), among others.”

The reason for pinpointing KPMG is for they are one of the important entities behind the coming valuation of companies performances in compliance with ESGs.