The European ESG market - Introducing the SFDR

EFAMA has published its latest Market Insights report entitled "The European ESG market - Introducing the SFDR". The full report breaks down the size of the European ESG market and provides an overview of investment companies' assets under management

These are the key findings of the report:

• SFDR Article 8 Funds - The net assets of SFDR Article 8 funds totaled €3.7 trillion at the end of Q1 2021, representing 22% of the European fund market. The main domiciles of SFDR Article 8 funds are Luxembourg (35%) and France (16%). In terms of domestic market share of Article 8 funds, Sweden leads (92%), followed by Belgium (50%) and the Netherlands (48%).
• Article 9 SFDR funds - Net assets amounted to EUR 340 billion at the end of Q1 2021, or about 2% of the European fund market. Luxembourg accounted for more than half of the total net assets of SFDR Article 9 funds, followed by France (16%) and the Netherlands (9%). Since the total net assets of SFDR Article 9 funds are small, it is not surprising that the market share of these funds at the national level is correspondingly low. SFDR Article 9 funds accounted for 0% to 4% of funds domiciled at the national level.
• SFDR Funds by Asset Class - Equity funds accounted for 47% of all Article 8 funds and 71% of all Article 9 funds, while representing only 30% of the total UCITS and AIF market.
• Broader ESG investment approaches across the industry - Asset managers in Europe applied an ESG investment approach to a total of EUR 11 trillion in assets, funds and mandates at the end of Q1 2021. This figure is slightly higher than the 2019 estimate (EUR 10.7 trillion).

The full report can be accessed here.