ALFI's take on ESG - Why Luxembourg can make a difference
For the ALFI, responsible investing is more than a set of principles to comply with, it is a matter of utmost importance. Everyone can make a change through their investments. Here Ms. Agnes Anouk, Deputy Director General of the ALFI shares some numbers that show why Luxembourg can make a difference.
Investments funds play a crucial role as fuel for the “real” economy and can have a significant influence on the direction in which our economies are developing. The ALFI is convinced that asset managers as the interface between their clients’ desire to invest on the one hand and the project on the other hand have the ability to give sustainability a much-needed push.
The prerequisites are there. Generational changes in the investor base have led to an increased demand for transparency and participation, and the perceived rise of sustainable investing is backed up by the figures. The European market of responsible investing funds has almost doubled since 2010, reaching €476 bn AuM at the end of 2016. Luxembourg is the leading domicile for responsible investing funds in Europe, with a market share of roughly a third in terms of both fund numbers and AuM. For “green”, i.e. environmentally themed funds (including those related to climate change), Luxembourg stands at 45% of European AuM. Its long-standing expertise in the area of microfinance has resulted in the Grand Duchy serving as the domicile of reference for microfinance funds, with a market share of more than 60% of global AuM. Two out of three European social impact funds – vehicles that put generating a social return alongside a financial return at the core of their investment strategy – are based in Luxembourg.
We have been an early mover in actively promoting responsible investing opportunities for asset managers. Ever since it introduced responsible investing as the third pillar of the Luxembourg investment fund industry alongside UCITS and AIFs, the association has been advocating responsible investing and raising awareness for its many possibilities. The ALFI works towards providing investors with the information and the power to direct their money towards the projects of their choice, and asset managers with the tools they need to accommodate their investors’ choices.
For the ALFI, responsible investing is more than a set of principles to comply with. It is truly a matter of utmost importance, and we are pleased to see that more and more industry players share this conviction. Everyone’s investments can make a change.