The flow of money into sustainable investment funds, notably ESG funds, in Luxembourg significantly reversed last year when compared to a year earlier, according to data presented by the Belgian asset managers association Beama.
The share of “advanced ESG” funds, such as those labelled as Article 9 funds under the EU’s Sustainable Finance Disclosure Regulation (SFDR) declined some 40 percent last year compared to 2022, while the share of “light ESG” dropped 42 percent.
The Beama data, presented on Wednesday at the Trends Investment Summit in Brussels, makes clear that the rate of ESG adoption differs between countries even inside Europe.
Contrast with rest of Benelux
The Luxembourg outflows contrasted with those measures in the Netherlands, where light ESG funds accounted for 43 percent of the overall flow share last year, and advanced ESG funds 17 percent. In Belgium, advanced ESG funds accounted for 48 percent of total inflows last year.
Like Luxembourg, Italy and the Germany-Austria region also reported a significant outflows for ESG funds. The Nordic countries then again reported consistent inflows, with light ESG funds accounting for 71% of flows.
Overall, Europe was home to nearly 8,000 billion in ESG assets last year, compared to 443 billion for the United States. Europe accounted for 53 percent of the global ESG market share, compared to 1 percent for the U.S. Europe as a whole last year saw 3 percent growth in advanced ESG assets and 1% in light ESG.
The US experienced a decline of 77 percent in advanced ESG assets last year. This segment still shows a three year compound annual growth rate of 11 percent.
Different rates of ESG adoption across Europe
