ESG Funds Still Hold BP Despite Shift Back to Fossil Fuels

A Financial Times analysis finds that managers such as BlackRock, UBS and Legal & General are maintaining stakes in the oil company after it scaled back its renewables strategy.

Over 60 active environmental, social, and governance (ESG) funds continue to hold BP (British Petroleum) stocks, despite the company reducing its focus on renewable energy and returning to prioritizing fossil fuels. Leading managers involved include BlackRock, UBS, and Legal & General.

This is according to an analysis by the Financial Times , based on data from provider Morningstar Direct , which found that actively managed funds maintained holdings even after BP backtracked on its oil and gas commitments.

Overall, according to Morningstar data, more than 110 ESG funds, both active and passive, held BP securities at the end of 2025

Of these, more than 60 are actively managed ESG funds, meaning investment vehicles that make discretionary decisions about portfolio assets and do not simply replicate a benchmark index.

In early 2026, BP announced a “reset” of its energy strategy , scaling back some climate ambitions. The company reduced its target of cutting oil and gas production by 2030 from 40% to 25%, after CEO Murray Auchincloss said the company had gone “too far, too fast” in the energy transition.

Among the funds with the greatest exposure to the company are ESG products offered by several international managers, including Legal & General, BlackRock, UBS, Royal London, Swiss Canto, Oddo and Banca Popolare.

BP’s presence in actively managed ESG funds raises questions about managers’ decisions. “If an active manager hasn’t sold the position, you’d expect them to have a good reason not to,” noted Kenneth Lamont, head of manager research at Morningstar.

Some companies explained the reasons behind their decision to maintain exposure. Legal & General stated that it manages funds with various sustainability objectives and is continuing to engage with BP on the financial importance of the energy transition. Swiss Canto, on the other hand, emphasized that its approach aims to support the transition to a low-carbon economy rather than applying blanket exclusions.

BlackRock also noted that one of its UK equity ESG funds closely tracks the FTSE All-Share Net Index with sustainability guidelines, while Royal London noted that some products must maintain a strong exposure to the benchmark index, which in the UK market includes a significant share of energy companies.

However, not all managers maintained their positions. AXA Investment Managers, now part of BNP Paribas, sold BP holdings from its ESG funds, which previously had significant exposure to the company.

The data has also fueled debate about the risk of greenwashing in the sustainable finance sector. “Most people don’t expect funds that call themselves ESG or green to be exposed to companies that expand fossil fuels,” said Paul Schreiber, senior policy adviser at green nonprofit Reclaim Finance. Ultimately, the presence of oil companies in ESG funds reinforces concerns about the actual consistency of some products with climate goals.

Meanwhile, the issue is also at the center of the European regulatory debate. The European Union is considering excluding fossil fuel developers from certain categories of sustainable funds, while over 130 environmental organizations are calling for the ban to be extended to all ESG funds.

At the same time, asset managers are facing divergent political pressures in the United States and Europe. In the United States, some Republican-led states have accused large asset managers of restricting financing to the fossil fuel sector, while in Europe, there is growing demand for stricter rules on ESG labels and portfolio transparency.

__

(Featured image by Towfiqu Barbuiya via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.