EFAMA collaborated with its member associations and strategy consultants at INDEFI to estimate the level and nature of ESG investment by European asset managers at the end of 2019...
The European Fund and Asset Management Association
(EFAMA) has published its first ESG-focused Market Insights “Sustainable
investment in the European asset management industry: defining and sizing ESG
strategies”.
For this 
Market Insights, EFAMA collaborated
with its member associations and strategy consultants at INDEFI to estimate the level and nature of ESG investment by European asset managers at the end of 2019, distinguishing between the
ESG strategies
applied at the firm level and those applied at the
level of individual fund and discretionary mandate. The assets
under management covered in the report include EUR 12.5 trillion of investment
fund assets and EUR 11.4 trillion of mandate assets.*
Tanguy van de Werve, Director General of EFAMA,
commented: “The research confirms that a wide variety of sustainable investment approaches
are followed, demonstrating the need to exercise caution when quantifying the
true size of the European ESG market. EFAMA and its members are committed to
supporting the efforts undertaken to clarify which investments can be deemed sustainable,
while ensuring enough flexibility to support the industry’s contribution to the
financing of the green transition through collaboration and innovation.”
Richard
Bruyère, Managing Partner at INDEFI, commented “Echoing our findings on the
institutional market, this analysis confirms that Europe has turned a corner in
terms of sustainable investment. The breadth of practices and level of
innovation witnessed in our industry demonstrates that asset managers are
embracing a new competitive landscape in which sustainability will no longer be
an option one can do without.”
Highlights include:
- Firm-level ESG selection strategies represented a
total of EUR 10.7 trillion or 45% of the total assets under management at the end of 2019 in the countries covered in the report. These strategies include two broad types of ESG selection: exclusions of certain
types of investment and systematic and explicit integration
of ESG risks and opportunities in the investment decision-making process.
- Exclusions
are one of the most basic and common forms of ESG selection strategy – nearly a third of assets covered in the report applied this
strategy. ESG integration is the most popular ESG selection strategy,
with a little over 37% of total AuM are selected following this approach.
- Investment
stewardship and engagement also play a key role in the ESG strategies of many
asset managers: EUR
10.2 trillion of assets are subject to ongoing ESG-related engagement or voting
policies, accounting for over 43% of total AuM.
- Product-level ESG selection strategies include four different approaches: exclusions, ESG
integration, sustainability-themed products and impact investing. ESG integration is the most common selection strategy at
the product-level in Europe. In total, EUR 3.9 trillion of assets are managed
in this way, accounting for around 16% of total fund and mandate assets.
According to EFAMA, the following actions will
play a crucial role in the further development of the European ESG market:
- Narrowing
the data gap by ensuring reliable and comparable ESG data reporting by
companies in Europe and beyond.
- Increasing transparency through appropriate disclosures by asset
managers.
Avoiding the proliferation of national ecolabels by
promoting the use of an EU label.
* This information is based on data covering the following countries:
Belgium, Bulgaria, Denmark, France, Germany, Greece, Italy, Liechtenstein, the
Netherlands, Norway, Poland, Portugal, Slovenia, Sweden, Switzerland, and the
United Kingdom. The data has been
provided by EFAMA member associations and asset management companies. The
definitions used in the survey are broadly aligned with those of the UN Principles for
Responsible Investment and the Global Sustainable Investment Alliance. Data was
collected on the basis of where the day-to-day management of the fund and
mandate portfolios is carried out. EFAMA
© EFAMA - European Fund and Asset Management Association
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article