The European Green Funds Market +49%

Green fund market in figures

Publication :April 2018

Paris, 18 April 2018. The increase in environment-themed funds is accelerating in Europe. Assets Under Management (AUMs) doubled between 2013 and 2017 and now exceed €32 billion for the 176 listed funds available on the market.  Overall progress with the asset market is significant: +49% growth between 2016 and 2017. This correlates with major support for sustainable finance from the European Commission and the creation of its high-level expert group, which was put in place to make sustainable finance a major strategic focus.

HETEROGENEOUS GEOGRAPHICAL DEVELOPMENT

French and Swiss management companies largely dominate the market for environment-themed funds; a category that has seen unequal development from one country to another.

French leadership, which makes up 32% of the market, is largely explained by investor engagements. This is in line with the introduction of Article 173 of the Energy Transition Law. Engagements are also consistent with strong political influences that include the TEEC green public label and commitments made during the One Planet Summit in December 2017.

 

TWO TRENDS TO FOLLOW: ENVIRONMENT-THEMED FUNDS AND LOW CARBON FUNDS

Funds classified as environment-related in general, prevail in terms of attractiveness. They raised more than €3.27 billion in 2017, ahead of water-themed funds which amassed nearly €1.8 billion, and lead in terms of AUMs  (€11.3 billion). The most notable change relates to "low carbon" funds, half of which are tracker funds (ETFs). Even though AUMs represent less than €3 billion (€2.7 billion), there numbers almost doubled in 2017 and reported the highest inflow rates (+ 57%, totaling €867 million). They also have the best performance out of the green funds category (17,6% on average for the year).

"Our analysis of the European green funds market allows us to measure the increasing attractiveness of financial products that make it possible to integrate environmental dimensions into their investment strategy. It's important to have statistics that measure the weight of green finance. We can see an imperative need to give more scale to these types of investments to meet the growing demand coming from not only institutional investors but also retail ones, who are eager to contribute to financing the European Union’s transition to a low-carbon economy.”

Anne-Catherine Husson-Traore, CEO of Novethic