Sustainable Finance in Luxembourg 2024

In H1 2024, the total AuM of ESG Undertakings for Collective Investment in Transferable Securities (UCITS) stood at EUR 3,247.7tn, up from EUR 3,020.7bn in H1 2023. The AuM of ESG UCITS made up 73.3% of the total UCITS AuM in Luxembourg (EUR 4,428.3tn) in H1 2024, a figure which has not shifted much since H1 2023.

In terms of number of funds, nearly half (48%) of Luxembourg-domiciled UCITS disclose as per Article 8 of the SFDR. Together with Article 9 funds, they account for 53% of all Luxembourg domiciled UCITS, while the remainder are disclosing as per Article 6 of the SFDR (44%) or are funds with no SFDR disclosure (3%).

The growth experienced by ESG private market funds has been remarkable. Their AuM rose from EUR 42.9bn in 2019 to EUR 622.8bn in 2023 – growing at a compound annual growth rate (CAGR) of 95.2%.

The most reported optional PAI by all financial market participants in 2024 was the investments in companies without carbon emission reduction initiatives, reported by 8 AIFMs, 29 Super ManCos, 7 UCITS ManCos, 8 banks and 5 insurance companies, totalling 57 financial market participants out of the 98 entities that have published a PAI report on entity level. 195 financial market participants have issued an explanation as to why they do not consider PAIs.

*Include AIFMs, banks, insurance companies, Super ManCos, and UCITS ManCos

Among the 440 financial market participants analysed in Luxembourg, banks show the highest participation rate in the three major international climate initiatives analysed – the Glasgow Financial Alliance for Net Zero (GFANZ), the Partnership for Carbon Accounting (PCAF) and the Science-Based Targets Initiative (SBTi) – with 30% of banks adhering to at least one of them.