sustainable finance disclosure regulation

Luxembourg is by far the leading EU domicile for environmental funds, according to a new report by PwC. Assets under management in green funds in the Grand Duchy are greater than the combined totals of the next three largest domiciles for these products. This article explains why this might be so.

Not all European regulations are good. Under the Sustainable Finance Disclosure Regulation (SFDR), part of the EU Green Deal, asset managers must disclose information on sustainability. The objective is thus more transparency and openness in this area. However, from the start the directive was used as a means to classify funds.

If Europe’s nations decide to enforce different local guidelines when it comes to the Sustainable Finance Disclosure Regulation (SFDR) it would be detrimental not just to asset managers but also investors, industry insiders have warned.

The SFDR came into effect on 10 March, when asset managers in the European Union had to decide whether their funds fit into one of three categories set out by the regulation, designating the level of sustainable characteristics. But that was only the beginning.