Navigating Recalibration

Sustainable Finance in Europe and Luxembourg 2025

Report
March 19, 2026

1.6tn

Total AuM sustainable public and private market funds domiciled in Luxembourg as of end-2024 (in EUR).

815.4bn

Total AuM of sustainable public market funds domiciled in Luxembourg as of end-2025 (in EUR).

855.6bn

Total AuM of sustainable private market funds domiciled in Luxembourg as of end-2024 (in EUR).

2,327

Number of sustainable public market funds domiciled in Luxembourg.

Since December 2024, the sustainable finance ecosystem has continued to evolve in an environment marked by persistent geopolitical tensions, increased macroeconomic volatility, and a changing regulatory framework.

At the same time, challenges related to climate change, biodiversity loss, and social inequality remain at the forefront of economic and financial concerns. Climate and transition risks are increasingly influencing investment decisions and underscoring the need to direct capital toward activities that contribute to a more resilient and sustainable economy.

Despite this, sustainable finance continues to grow. Globally, sustainable public market funds reached EUR 3.1tn in AuM at the end of 2025, up from EUR 1.7tn in 2020, reflecting their increasing integration into the asset management industry.

In this context, sustainable finance plays a key role in directing capital flows towards initiatives and projects that support the transition to a more sustainable economy.

Some key takeaways from the report

Between 2020 and 2025, their AuM rose from EUR 527.5bn to EUR 815.4bn (CAGR 9.1%), while conventional public market funds totalled EUR 3,495.4bn in AuM. The number of sustainable funds reached 2,327.

Equity remains the main asset class among these funds (EUR 442.7bn AuM), while fixed income continues to grow (EUR 285.0bn AuM in 2025 compared to EUR 255.6bn AuM in 2024).

Public market funds subject to Articles 8 and 9 of the SFDR represented EUR 3.1tn in AuM at the end of 2025 (71.5%), compared with EUR 1.2tn (28.5%) for conventional funds. Public market funds disclosing as per Article 8 dominate with EUR 2,919bn in AuM, compared with EUR 165.2bn for funds disclosing as per Article 9.

At the European level, Article 8 and 9 public market funds totalled EUR 7.0tn in AuM at the end of 2025 (49.7%). The annual increase in AuM in 2025 (+ EUR 478.2bn) was significantly lower than in 2024 (+ EUR 834.6bn).

AuM increased from EUR 190.2bn in 2020 to EUR 855.6bn in 2024 (CAGR 45.6%) and continued to grow strongly compared with 2023 (EUR 686.1bn, + EUR 169.5bn). Luxembourg remains the leading European domicile for sustainable private market funds, accounting for 77.0% of total European AuM in this segment.

In terms of asset classes, private equity dominates with EUR 385.1bn in AuM (45.0%), followed by infrastructure funds with EUR 258.1bn (30.2%). Real estate funds account for EUR 107.5bn (12.5%), while private debt funds total EUR 104.9bn (12.2%).

At the end of 2025, sustainable public market funds represented 18.8% of total public market fund assets in Europe. Since 2020, these funds have experienced sustained growth (CAGR 12.6%).

In Europe, sustainable private market funds reached EUR 1,100.8bn (27.4%) of total European private market fund AuM at the end of 2024. Since 2020, these funds have experienced very strong growth (CAGR 41.8%).

Sustainable Finance in Europe and Luxembourg 2025

Navigating Recalibration

Contact us

Geoffroy Marcassoli

Audit Partner, EMEA AWM ESG Leader, PwC Luxembourg

Tel: +352 621 335 410

Michael Horvath

Advisory Partner, Sustainability Leader, PwC Luxembourg

Tel: +352 621 333 612

Kenny Panjanaden

Audit Partner, PwC Luxembourg

Tel: +352 621 336 078

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