It's been almost a year since the European Union introduced its Sustainable Finance Disclosure Regulation, requiring for the first time that asset-management companies provide information about their investments' environmental, social, and governance risks as well as their impact on society and the planet. Since 10 March 2021, funds available for sale in the EU have been classified by their managers as Article 6, 8, or 9, depending on their sustainability objectives.
A lack of clear policy guidance has resulted in different approaches to product classification, which in turn have led to confusion and greenwashing concerns. This report provides a view of the rapidly evolving landscape of Article 8 and Article 9 funds at the end of 2021, examining the continued growth in assets, flows, and products, with a focus on the last three months of the year. We also analyse the ESG credentials of these so-called "light green" and "dark green" funds, looking at their current level of ESG risk and controversial activities exposures