Luxembourg Top Of The Pile As ESG UCITS Reach €6.2tn

Frédéric Vonner, partner and sustainable finance sustainability leader at PwC Luxembourg (Photo © PwC Luxembourg)

Luxembourg remains a leader in sustainable investment and is still the leading domicile for ESG UCITS funds, which saw a €1tn year-on-year increase in 2023. PwC estimates they will reach over €9tn by 2027.

The latest data from professional services firm PwC shows that Article 8 and Article 9 funds reached €6.2tn in 2023. The former promote environmental or social characteristics, and the latter cover sustainable investments.

Luxembourg remains the leading domicile for ESG UCITS, with 45.7% of the total assets under management (AuM) of Article 8 funds and 60.8% of the total AuM of Article 9 funds. Ireland comes in second in attracting UCITS, followed by France and Sweden. Since their introduction by the EU in 2021, investments in that category have significantly grown in popularity, evidenced by the year-on-year increase.

“We do not expect this growth to slow down anytime soon, and now project ESG UCITS AuM in the EU to reach €9.4 trillion by 2027. Our latest data showcases a shift towards more diversified sustainable investment strategies.”

Frédéric Vonner, partner and sustainable finance and sustainability leader at PwC Luxembourg.

The PwC sustainability expert highlights a growing interest in Article 8 money market funds and passive options such as Article 8 and Article 9 Exchange-traded Funds (ETFs) which now represent 24.4% of the total AuM of EU ETFs. American multinational investment company BlackRock is the leader among asset managers in the Article 8 category with €432.6bn. Swiss private bank Pictet takes the lead when it comes to Article 9 funds. The top asset manager by number of Article 8 funds is Amundi. And in the Article 9 bracket, Candriam has the most funds.

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