Green funds still lack compatibility with EU taxonomy
Quantity should not overshadow quality. The market for European green funds is expanding fast, with 227 funds amounting to €59.3bn, according to a study by Novethic, with the support of Ademe, the French environment and energy efficiency agency, intitled “European green funds and the taxonomy challenge.” The research office also stated that the funds “will have to transform their selection and reporting procedures to align with Europe’s environmental objectives”.
Novethic analysed in detail the portfolios of the equity funds on its panel to determine whether they were compatible with green taxonomy. “A review of public disclosures of portfolio companies found many gaps,” it said. “As things stand, the average proportion of portfolios from eco-activities listed by the taxonomy is no more than 30%. Fewer than about 20 funds have a “taxo-compatible” share higher than 50%.”