German funds with sustainability features gained €849 billion in Q2 2023, reported the German Investment Funds Association, the BVI.
According to the report on Germany’s sustainable fund market, investments in these funds – categorised as Article 8 or 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR) – have increased by 3.4% since the end of March.
Retail funds with sustainability features accounted for €668 billion of the total volume – representing 50% of the money invested by German investors in retail funds.
‘Spezialfonds’ – German fund structures for institutional investors – with sustainability features managed €181 billion for their German institutional investors.
Overall, German investors recently allocated more money to funds without sustainability features (€26.3 billion). BVI attributed this to demand for segments with fewer sustainable funds.
A recent BVI survey revealed that over two-thirds of specialists and managers at fund companies rated sustainable investments as “a key growth driver” in H1 2023. Sustainable investments achieved the highest value among all business units, surpassing sales and IT.
Sustainability-related MSCI ratings for listed companies by region showed that German listed companies have good sustainability scores based on the exposure and management of ESG risks.
German companies secured the highest rating in the environmental category, beating other European regions and the US. Germany also emerged as a top performer in social and governance categories, with only Japan and other European regions having better ratings.
MSCI suggested that Germany’s rating could have improved without the “significant controversies” related to human rights violations within the Volkswagen Group’s Chinese joint ventures.
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