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SFDR and the quest for certainty | Market Insights | Issue #7

Sustainable Finance | EU Taxonomy | Sustainability-related Disclosures (SFDR)
16 November 2021 | Press Release
Sustainable Finance
EU Taxonomy
Sustainability-related Disclosures (SFDR)
cover market insights 7

EFAMA has today released its latest Market Insights report titled The European ESG market – Introducing the SFDR”. The full report breaks down the size of the European ESG market, reviewing the assets under management of funds using the SFDR (Sustainable Finance Disclosure Regulation) framework.


Although it was not the regulators’ intention for SFDR Articles to be treated as product labels, the implementation of SFDR has, in practice, split the EU fund universe into three categories. Each category is named after the relevant Article in SFDR: Article 6 are funds that integrate sustainability risks, Article 8 are funds with sustainability characteristics and Article 9 are funds that have sustainability objectives.


The new Market Insights marks the first time EFAMA, in cooperation with national associations, has collected data on SFDR Article 8 and 9 funds specifically. The survey data has proven complementary to data collected from commercial data providers, as it offers a more complete picture of the European fund market, with a better coverage of the AIF market segment.


Thomas Tilley, Senior Economist at EFAMA, commented: The coverage of funds by SFDR Articles 8 and 9 is considerably uneven across Europe. Various factors play a role here, such as different SFDR Level 1 text interpretations by national regulators, the delayed implementation of the Level 2 measures and varying maturity levels of ESG fund markets between Member States.


These survey results provide a first picture of a market that remains in full flux and should therefore, be treated with some caution. The ESG market has already undergone significant changes since the SFDR introduction and will undoubtedly undergo further changes in the coming months and years.”


While the fund management industry still faces difficulties and uncertainties in the implementation process of the SFDR framework, EFAMA is confident that these challenges will fade once the regulatory framework is complete and investors have access to the necessary corporate reporting data to comply with their new obligations.


Tanguy van de Werve, EFAMA Director General, concluded: “The European Union is taking a global lead in standardising funds´ sustainability disclosures with SFDR, thereby contributing to the redirection of capital flows towards sustainable projects and businesses. This new legislation will reduce the information asymmetries on ESG issues, ultimately empowering end investors to play a role in financing solutions for pressing societal challenges.”



Here are the key findings of the report:


  • SFDR Article 8 funds - Net assets of SFDR Article 8 funds totalled EUR 3.7 trillion, making up 22% of the European fund market at the end of Q1 2021. The main domiciles of SFDR Article 8 funds are Luxembourg (35%), France (16%), the Netherlands (13%), Sweden (13%) and Ireland (9%). In terms of the domestic market share of Article 8 funds, Sweden took the top spot (92%), followed by Belgium (50%) and the Netherlands (48%).
  • SFDR Article 9 funds - Net assets amounted to EUR 340 billion, or about 2% of the European fund market at the end of Q1 2021. Luxembourg accounted for more than half of total SFDR Article 9 fund net assets, followed by France (16%) and the Netherlands (9%). As the total net assets of SFDR Article 9 funds are low, it is unsurprising that the market share of these funds at national level is correspondingly low. SFDR Article 9 funds accounted for 0% to 4% of national domiciled funds.
  • SFDR funds by asset class - Equity funds accounted for 47% of all Article 8 funds and 71% of all Article 9 funds, whereas they only accounted for 30% of the total UCITS and AIF markets.
  • Broader ESG investment approaches across the industry - Asset managers in Europe applied an ESG investment approach to a total of EUR 11 trillion of assets, funds and mandates, at the end of Q1 2021.  This figure is slightly higher than the 2019 estimation (EUR 10.7 trillion).


The Market Insights was prepared by Thomas Tilley, EFAMA Senior Economist, as well as Dominik Hatiar and Mathilda Loussert, EFAMA Regulatory Policy Advisers. More details under 'download' above.



– Ends –

Notes to Editors:


For further information, please contact:


Brandon Bhatti

Hume Brophy


Daniela Haiduc                                                 

Head of Communications                                              

+32-2-473 562 936                                                                               



About the European Fund and Asset Management Association (EFAMA)


EFAMA is the voice of the European investment management industry, which manages over EUR 27 trillion of assets on behalf of its clients in Europe and around the world. We advocate for a regulatory environment that supports our industry’s crucial role in steering capital towards investments for a sustainable future and providing long-term value for investors.


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