Maples Group’s Third SFDR Impact Analysis Estimates 24% Growth in the Number of Sustainability Focused Funds, with Assets now Exceeding €6 Trillion

Based on a review of over 27,000 funds across the two largest fund domiciles in the EU, Ireland and Luxembourg, the analysis shows a 24% year-on-year growth in the number of sustainability-focused funds (i.e. either SFDR Article 8 or SFDR Article 9 funds), with assets in European sustainability focused funds now surpassing €6 trillion (having risen from €5.5 in 2023).

Other key findings:

• 33% of all Irish and Luxembourg-domiciled funds (over 9,000) are sustainability-focused funds;
• Nearly half of all assets held in Luxembourg and Irish domiciled funds are now held in sustainability focused funds;
• 54% of all new funds launched in Europe in 2024 were established as sustainability focused funds;
• The number of sustainability-focused funds has increased by nearly 60% (with assets held in those funds having increased by 40%) over the last two years;
• Over 1,800 sustainability-focused funds in Luxembourg and Ireland are focused on private equity and real assets strategies, mirroring the growth in the European private equity and private debt space; and
• Sustainable ETFs continue to thrive and 43% of all ETFs are now sustainability-focused funds.

This is the third edition of the Maples Group’s SFDR Impact Analysis. It is designed to assist asset managers looking to fund raise in Europe, helping to navigate through the complex and evolving SFDR requirements, as well as providing valuable insights and peer analysis on the approaches taken to date.

Ian Conlon, Funds & Investment Management Partner and European Lead of the Sustainable Investing Group, said: “2024 was undoubtedly a challenging year for the sustainability space, growing anti-ESG sentiment could have stifled the flow of capital towards sustainable funds. For assets levels to have grown, to now exceed €6 trillion, is truly remarkable and demonstrates not only the resilience of this sector but the continuing demand for sustainable products from European investors.”

“Asset managers are recognising that in order to successfully fund raise in Europe, their strategies need to be SFDR aligned. Our analysis shows that global asset managers are not retreating from sustainable investing, there is more customisation occurring, with sustainable focussed products being developed and specifically tailored for the European investor market.”

Michelle Barry, Luxembourg Funds & Investment Management Partner, added: “We continue to see sustainability-focused funds investing across a wide range of asset types. Noticeably the portion of sustainability-focused funds investing in private assets almost doubled in 2024. Continued investor demand for private asset strategies coupled with a renewed interest in European Long-Term Investment Funds (ELTIF) will further drive this growth in the private fund space in the coming years.”

Peter Stapleton, Managing Partner and Global Lead on of the Sustainable Investing Group, said: “The continued growth in sustainability-focused funds across Europe in a volatile market is both extremely impressive and encouraging, in the context of long-term objectives. I would like to commend Ian, Michelle and our European teams for building our analysis into one of the most eagerly awaited research pieces across this sector. It will be of invaluable assistance to our clients who continue to navigate a complex regulatory environment. Our European thought leadership complements and builds upon the work Maples is doing across our Group for some of the largest global asset managers and their investors.”

The Maples Group’s SFDR Impact Analysis also examines how SFDR is continuing to impact product design and distribution. It also provides insights into key developments in sustainable finance, such as the proposed SFDR 2.0, the Omnibus Package and the ESMA Naming Guidelines.

Authored by lawyers from the Maples Group’s Irish and Luxembourg Sustainable Investing team, the analysis demonstrates the extensive experience and expertise the firm has in advising asset managers on SFDR and other sustainable finance regulations and initiatives.

This year’s analysis builds not only on our first two years of research but a much broader body of work and thought leadership in this sector including the establishment of Maples Group Sustainability Investment Platform, created to host sustainable funds looking for distribution in the EU. Learn more about all our market leading end-to-end ESG solutions on our Sustainable Finance & ESG webpage.

A full copy of the SFDR Impact Analysis 3rd Edition is available for download.