Best Execution
  • Home
  • Publication

    Best Execution

    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Market Opinion
    • Supplements
  • Topics

    Topics

     

    • Equities Trading
    • Fixed Income Trading
    • Derivatives Trading
    • FX – Foreign Exchange
    • Post-trade
    • ESG
  • Partners
  • Listings
  • Awards

    AWARDS

    • European Markets Choice Awards 2021
    • European Women in Finance – The Programme
    • European Women in Finance – The Winners
  • Events
  • About us

    About us

    • Marketing
    • Media info
    • Contact
  • Newsletter
  • Login
  • Home
  • Publication
    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Market Opinion
    • Supplements
  • Topics
    • Equities Trading
    • Fixed Income Trading
    • Derivatives Trading
    • FX – Foreign Exchange
    • Post-trade
    • ESG
  • Partners
  • Listings
  • Awards
    • European Markets Choice Awards 2021
    • European Women in Finance – The Programme
    • European Women in Finance – The Winners
  • Events
  • About us
    • Marketing
    • Media info
    • Contact
  • Newsletter
  • Login
HomeESGESG-NewsUp to 25% of funds of total European funds under m ...
Previous Next

Up to 25% of funds of total European funds under more stringent SFDR rules

Posted by: Lynn Strongin Dodds, March 31, 2021
Tweet
Share
Share
Pin
0 Shares

Funds subject to higher standards of disclosure under the European Union’s Sustainable Finance Disclosures Regulation (SFDR) regime currently represent up to 21% of total European funds and 25% of total European fund assets, according to research from Morningstar.

The SFDR, which came into force on 10 March, requires asset management firms to classify each fund as either Article 6, 8, or 9, depending on the product’s sustainability objective.

Article 8 products are those which actively promote environmental or social (ESG) characteristics, while Article 9 have sustainable investment as their objective.

Morningstar reviewed 49.3% of the 11,500 open-end funds and exchange-traded funds domiciled in Luxembourg, Europe’s largest funds domicile.

Of these, 18.0% and 3.6% were classified as Article 8 and Article 9, respectively, representing combined assets of €768bn, or 25% of the reviewed Luxembourg funds universe.

BaUp to 25% of funds of total European funds under more stringent SFDR rulessed on the preliminary research, the date provider estimates the European ESG and sustainable fund market, based on SFDR definitions, could currently be worth as much as €2.5trn.

It expects this figure to grow as managers have plans to enhance existing strategies, reclassify funds, and launch new ones that will meet Article 8 and 9 more stringent requirements.

The report notes that in this first classification exercise, asset managers have taken different approaches based on their interpretation of the regulation, with some preferring to take a conservative approach for fear of having to downgrade funds later.

On a relative basis, the report, which surveyed 30 asset managers, found that Nordic and Dutch asset managers feature among those with the highest proportion of Article 8 and 9 funds.

This is not surprising though given the long history and commitment to responsible investing of institutional investors in Northern European countries.

For example, Robeco has labelled 96% of its fund assets as Article 8 or 9, while KLP and SEB have 95% and 82% of their fund assets, respectively, in the two categories.

French managers Amundi and BNP Paribas which offered some of the largest ranges under Article 8 and 9 come in with a respective 60% and 80% of their existing fund assets.

It found that other large asset managers, including BlackRock, UBS, and JP Morgan, exhibited much lower ratios at 17%, 11%, and 1.5%, respectively.

“It is clear from the asset managers we spoke to, of various nationalities and sizes, that it is essential for them to have as many funds as possible classified as Article 8 or 9 under SFDR,” says Hortense Bioy, Global Director of Sustainability Research. “They see compliance with at least Article 8 requirements as an opportunity to demonstrate their commitment to sustainable investing.”

©Markets Media Europe

Back to Top

Tags: Amundi, Asset managers, Blackrock, BNP Paribas, ESG, Hortense Bioy, JP Morgan, KLP, Morningstar, Robeco, SEB, Sustainable Finance Disclosures Regulation (SFDR), UBS

Share!
Tweet

Lynn Strongin Dodds

About the author
mm

Related Posts

EWiF : Jeanne Martin : Engaging with investors

EWiF : Jeanne Martin : Engaging with investors

Jeanne Martin, Senior Campaign Manager at ShareAction talks to Shanny Basar about environment, ...
Women in Finance : Supurna VedBrat : Being on point

Women in Finance : Supurna VedBrat : Being on point

Supurna VedBrat, Global Head of Trading at BlackRock, talks to Lynn Strongin Dodds about strate ...
Active managers lag their passive peers over the decade

Active managers lag their passive peers over the decade

European buyside firms have been grappling with the steady migration of flows to passive from a ...
European Women in Finance : Sarah Gordon : Making an impact

European Women in Finance : Sarah Gordon : Making an impact

Senior writer Shanny Basar spoke to Sarah Gordon, CEO of Impact Investing Institute about how i ...

Leave a Reply Cancel reply

You must be logged in to post a comment.

Subscribe for Email Updates

Best Execution
Recent
  • Charlotte Crosswell to step down as CEO of Innovate Finance

    Charlotte Crosswell to step down as CEO of Innovat ...

    April 9, 2021
    Tradeweb reports record monthly and first quarter results

    Tradeweb reports record monthly and first quarter ...

    April 8, 2021
    Industry viewpoint : David Parker : MTS Markets

    Industry viewpoint : David Parker : MTS Markets

    April 8, 2021
    EWiF : Jeanne Martin : Engaging with investors

    EWiF : Jeanne Martin : Engaging with investors

    April 8, 2021
    Cloud moves OMS/PMS convergence one step closer

    Cloud moves OMS/PMS convergence one step closer

    April 7, 2021

Menu

  • Home
  • Publication
  • Topics
  • Events
  • Partners
  • Listings
  • Privacy notice
  • About us

Best Execution

In these uncertain times and as the tide of regulation rises ever higher and wider, Best Execution offers an in-depth analysis into the major trends that are shaping the financial services industry as well as providing a more detailed insight into the technology driving new products and services being developed to meet these challenges.

Where the buyside and sellside meet.

Wikipedia: Best Execution

Social

linkedin
Newsletter Sign Up
Copyright © 2021 Markets Media Europe Ltd.
  • Home
  • Publication
  • Events
  • Privacy notice
  • Login