Firm-level ESG strategies represented almost half of EU assets in 2019
Firm-level ESG strategies represented 45% (€10.7trn) of total assets under management at the end of 2019 in 16 key European countries. Exclusions of certain types of investments and systematic and explicit integration of ESG risks and opportunities in the investment decision-making process were the two broad types of ESG selection. The report covered €12.5trn assets under management and €11.4trn of mandated assets.
Exclusions are one of the most basic and common forms of ESG selection strategy, with nearly a third of assets covered applying this strategy. ESG integration is the most popular ESG selection strategy, with a little over 37% of total AuM are selected following this approach.
ESG stewardship and engagement play a key role in ESG strategies, with €10.2trn of assets (43% of total AuM) subject to ongoing ESG-related engagement or voting policies.
Product-level ESG selection strategies include four different approaches: exclusions, ESG integration, sustainability-themed products and impact investing. ESG integration, the most common selection strategy at this level, accounted for €3.9trn of assets (16% of total fund and mandate assets).
Efama underlined that narrowing the data gap by ensuring reliable and comparable ESG data reporting by companies in Europe and beyond will play a crucial role in further developing the ESG market. Increasing transparency through appropriate disclosures by asset managers and avoiding proliferation of national ecolabels by promoting the use of an EU label is also key to development.