A&P’s ESG press review – November 2023

Asset Management, Private Equity, Real Estate Investment, and Infrastructure Actors: Discover our ESG Press Review!

Every month, find our selection of 4 news items in the ESG field! Why an ESG press review? As a communication consultancy agency, we aim to provide you with the most relevant support. In this context, we conduct continuous monitoring and analyze the latest news and developments in the industry. This newsletter is therefore intended to share with you some news items that have particularly caught our attention. We wish you a very pleasant reading!

Towards a Revision of the SFDR Regulation?

Since 2021, the European SFDR regulation has become a new standard. Everyone has become accustomed to the terms “article 8” and “article 9” applicable to investment funds and management mandates incorporating ESG criteria. However, criticism of this classification remains numerous, both from asset management companies, investors, and regulators. The European Commission, as well as national regulators, are considering a reform of the SFDR regulation (article). For its part, the French Asset Management Association (AFG) proposed in late October to replace the “article 8” and “article 9” classifications with 3 categories based on minimum criteria to be met (article).

A Broad Definition for “Article 8” Funds?

According to an article published at the end of October on Boursier.com, based on Novethic data, Europe now has over 2,000 investment funds benefiting from at least one ESG label (including over 1,100 funds with the French ISR label). However, 80% of labeled funds belong to the SFDR “article 8” category, “which only imposes basic requirements” according to the article. “The alignment rates of labeled funds with the European taxonomy remain very low,” Novethic concludes. This observation calls for new developments.

ESG: AFG Publishes Survey Results

In October, the French Asset Management Association (AFG) published a report dedicated to responsible investment, providing a very comprehensive overview of the subject. A few key figures to remember: in France, as of the end of 2022, Responsible Investment assets under management amounted to €2,240 billion, of which €2,128 billion (95%) were in “article 8” and €112 billion (5%) in “article 9”. The entire volume was distributed 57% in funds and 43% in managed accounts. It is also worth noting that 43% of management companies declare holding impact funds (read the full report).

“Anti-ESG” Movement in the United States: A Threat to Watch

On November 2, L’Agefi reported that “half of the anti-ESG bills fail in the United States” (article). This statistic applies to 165 bills filed in 37 different states since last year. These laws seek to locally eliminate sustainable investment practices to support the oil and arms industries. Unfortunately, while half of the bills do not succeed, the other half do, leading some companies to backtrack in this area.

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