Amundi Wants Oil, Gas in EU’s New Energy-Transition Fund Class

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessAmundi Wants Oil, Gas in EU's New Energy-Transition Fund ClassAmundi SA wants the European Union to free asset managers to add oil and gas exposures to a new fund category intended to support the transition to a lower-carbon economy.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Amundi SA wants the European Union to free asset managers to add oil and gas exposures to a new fund category intended to support the transition to a lower-carbon economy.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountElodie Laugel, Amundi’s chief responsible investment officer, says excluding fossil-fuel producers from such funds would make it harder for money managers to pressure them to reduce their carbon emissions over time.“The more you have exclusion constraints on the transition category, the more you are missing the objective of actually using asset managers like us to help companies to transition,” she said in an interview. The comments from Europe’s biggest money manager come as Brussels rewrites the world’s most comprehensive regulatory framework for sustainable investing, the Sustainable Finance Disclosure Regulation. Efforts to overhaul the rule-set have overlapped with the ongoing war in Iran, which is forcing Europe to focus more on energy supply.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againSome of the proposed revisions to SFDR, which covers assets worth about $14 trillion, currently don’t go far enough in allowing asset managers to hold oil and gas companies in transition funds, Laugel said. The EU’s proposal on such funds, which represents just one plank of the revised SFDR framework, is a “challenge for us,” she said.SFDR, which was originally enforced in early 2021, is being overhauled after facing criticism it was a confusing piece of regulation that failed to prevent greenwashing. Lawmakers have been debating whether to require transition funds to exclude fossil-fuel companies still expanding production. Their inability to reach agreement led to the delay of a critical vote on revisions to SFDR that had been due to take place earlier this month.Proposals to include oil and gas exposures in transition funds come as companies including BP Plc and Shell Plc wind back earlier commitments to invest in renewable energy. Against that backdrop, some asset owners and managers have been stepping up exclusions of the sector, according to Covalence SA, a Geneva-based ESG ratings company.Fossil energy accounted for 30% of all sector exclusions in the second quarter, up 4 percentage points in just three months, according to an analysis conducted by Covalence. Money managers have long disagreed on the extent to which oil and gas companies belong in funds that claim to be supporting the clean-energy transition. Purists argue that investment clients would rightly be surprised to find that their sustainable fund holds fossil fuels. Energy companies have countered they’re more likely to transition if they’re not shut out by investors.TotalEnergies SE, the biggest oil and gas producer in France, has said that “excluding companies solely because they invest in new oil and gas projects, while disregarding their significant and expanding contribution to low-carbon energy, weakens key objectives the European Union aims to achieve,” according to an April document discussing SFDR and seen by Bloomberg.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Nareg Terzian, head of strategy and communications at the International Association of Oil & Gas Producers Europe, says the war in Iran — and an unpredictable administration in the US — means the EU needs to focus more on energy independence. There is “nascent discussion” among member states to tap reserves, and “we make sure that it’s on their minds,” he said.Supporting domestic energy production “is definitely part of the answer,” Terzion said. And it “should get greater attention.”Against that backdrop, oil, gas and coal companies should be included in transition funds, says Mitch Reznick, group head of fixed income at Federated Hermes in London. “Where returns justify the risk, transition funds should be able to invest in high-emitting sectors demonstrating genuine decarbonization through their governance, strategy and capital allocation,” he said.Laugel of Amundi says she “completely” understands that there might be greenwashing concerns. But “more transparency” could resolve that, while a ban would eliminate the leverage that asset managers have, she said.“If you are not around the table, there is this expression: that it’s likely that you are on the menu,” Laugel said.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.