With 53 participants managing an impressive EUR 1.62 tn in assets, the barometer serves as a beacon illuminating industry trends and challenges.
Global Participation Signals Growing Awareness
Participants by nationality and size PwC Luxembourg
This year’s barometer witnessed robust participation from Luxembourg-based management companies, affiliated with groups originating from Europe, North America, and Asia. Notably, Super Management Companies constituted a significant portion of respondents, underscoring a heightened awareness and commitment to sustainable finance practices on a global scale.
Article 8 Funds Lead the Charge
Within the sphere of sustainable finance products, Article 8 Funds emerged as the frontrunners, unsurprisingly. Over 30% of Management Companies oversee more than 45 such funds, signalling not only a profound emphasis on integrating Environmental, Social, and Governance (ESG) factors into investment strategies, but a mass adoption of these practices.
A Shift Towards Upgrades
Planned upgrades in the upcoming 12 months PwC Luxembourg
Among the key findings, a notable trend was the intention among Super Management Companies to upgrade their funds, with transitions from Article 6 to Article 8 being the most prevalent. However, planned downgrades were scarce, with only 3% of respondents indicating such intentions. This highlights a steadfast commitment to sustainable investment practices.
Rising Commitment to Sustainable Investments
Sustainable Investment commitment range PwC Luxembourg
Approximately 37% of respondents manage Article 8 Funds with a minimum commitment to Sustainable Investments, showcasing a significant increase compared to previous years. Notably, the most popular commitment range remains within the 5%-25% bracket of the portfolio, reflecting a balanced approach towards sustainability integration.
Navigating Challenges in SFDR Compliance
While progress is evident, the participants of the survey highlighted the numerous challenges that they face in complying with the requirements of SFDR. These include misconceptions about data coverage and quality, interpretation of regulations, and the establishment of robust methodologies. To address these hurdles, over half of respondents leverage service providers for compiling reports, with more than 40% seeking assurance on their SFDR annexes – a significant increase from the previous year.
Empowering Industry Stakeholders
The PwC SFDR Barometer serves as a vital tool for industry stakeholders, offering actionable insights to navigate the complex terrain of sustainable finance regulation effectively. As the financial landscape continues to evolve, the barometer stands as a lighthouse guiding the industry towards a more sustainable and responsible future.
For more information, reach out to the authors of this edition:
, ESG Assurance Leader, PwC Luxembourg
, Partner, PwC Luxembourg
, Senior Manager , PwC Luxembourg