MainStreet Partners has published its 2023 ESG Barometer report based on its database of 5700 funds/ETFs covering more than 300 asset managers.
The 2023 ESG Barometer provides a clear picture of the analytics of ESG research across a large universe of funds and looks at the SFDR classification and recent European ESG Template (EET) data points. It also explores ESG and sustainable strategies by asset class, sub-asset class, and by size of asset managers. Key findings include:
• Many funds with Article 9 status under the EU SFDR are not currently meeting the highest focus on sustainability that would be expected.
• Overall, the number and percentage of Article 9 funds in MainStreet Partners’ universe have remained steady, whereas there has been a clear shift from Article 6 to Article 8 (Article 6: 75% in 2021 vs 50% in 2022).
• Medium-to-Large Asset Managers continue to score slightly higher in ESG Ratings (on average) than Smaller/Boutique Asset Managers.
• Emerging markets funds are at a disadvantage compared with their developed market peers
Simone Gallo, Managing Director at MainStreet Partners says, “There is significant confusion in the market about what constitutes a sustainable fund as well as how to avoid the risk of ‘greenwashing’ across a huge offering of new products marketed as ESG, Impact or Sustainable. For these reasons we continue to see an increasing number of investors across Europe and Asia that either require, or desire, easy-to-understand and consistent ESG ratings that go beyond the simple bottom-up aggregation of ESG ratings of holdings to provide an independent holistic ESG due diligence”.