Funds and the State of European Sustainable Finance

Most assets under management in Europe (~EUR 7 trillion out of EUR 12 trillion) are invested in ESG funds or strategies with some sustainability-related focus. Most of the fund-based capital in Europe is therefore impacted to some degree by the EU Taxonomy, the SFDR and MiFID II. This has impacted on several aspects, from product launches and fund flows through to the levels of transparency for end investors.

This paper explores how the universe of funds domiciled in Europe have performed across these different streams. In particular, we focus on article 8 and 9 funds, assessing the degree of sustainability-related disclosures for European-domiciled funds, their performance on, and disclosure of, select adverse impact indicators, and exposure to sustainable investments.

Environmental and social PAI disclosure levels

Based on PAI disclosure and MSCI ESG Research assessments of large- and mid-cap companies of regions represented by the MSCI ACWI, Europe, USA and Emerging Market Indexes. Number of companies per region: global (2,882), Europe (424), U.S. (625), emerging markets (1,373). PAIs are defined in Annex 1, Table 1 of Commission Delegated Regulation (EU) 2022/1288. Official Journal of the European Union, 2022. Data as of April 30, 2023. Source: MSCI ESG Research