Similarities in Luxembourg’s Sustainable Funds

A study by the Luxembourg Sustainable Finance Initiative (LSFI) and PwC Luxembourg has found shared characteristics between UCITS funds classified separately under Europe’s Sustainable Finance Disclosure Regulation (SFDR). The study said there was no difference in average carbon weighting across Luxembourg-domiciled Article 6, 8 or 9 funds, implying the latter still maintained some exposure to carbon-intensive companies. It also reported “significant overlap” in holdings across Article 6, 8 and 9 funds, with a 93% overlap in the pool of companies owned by Article 9 and Article 8 funds. Luxembourg-domiciled ESG funds registered €2.2 trillion in total assets at the end of June 2022, with PwC estimating the AUM of ESG UCITS funds domiciled in Luxembourg will pass €3.3 trillion by 2026. Over 53% of UCITS AUM in Luxembourg is invested in funds compliant with Article 8 or Article 9 funds. 

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