Key Takeaways

1. 2024 Beyond Feelings

The responsible investment market normalization continues, in a year marked by additional transparency requirements and continued companies’ commitments.

In 2024, responsible investment funds AUM growth was generally subdued, totaling €57 billion in the first 3 quarters, compared to over €98 billion in the broader non-ESG market in Europe. RI funds’ market shares, generally stabilized across regions, with Article 8 and Article 9 funds maintaining an asset market share of c. 59% in Q3 ’24 vs. 56% in Q3 ‘23. Global RI fund launch cooldown continued, such a shift indicating a maturing market facing increased scrutiny, driven by stricter regulatory developments such as ESMA’s guidelines and France’s ISR label, aimed at enhancing transparency and preventing greenwashing.

2. Energy Transition at Global Crossroad

Maintaining the exponential momentum amidst geopolitical shifts.

Geopolitical shifts in Europe and the U.S., particularly with Trump's recent reelection, present both challenges and opportunities for sustainability efforts. While Trump's emphasis on "cheapest energy" may boost fossil fuel production, if one accepts the prior that clean energy has become the most competitive option in many key applications, it could also provide a foundation for an acceleration in the development of green energy assets. This election also serves as a critical reminder for Europe, which has historically shown resilience and adaptability under pressure, of the critical need to combine a pro-green and pro-competitiveness agenda.

    3. The Net Zero Countdown

    Pursuing innovation to meet decarbonisation targets.

    Strategies oriented towards real-world impacts are driving the development of innovative financial products, with increased investors demand for outcome-based bonds, financial product with coupon linked to project success, and impact investments, which have seen respective annual growth rates of 6% and 21% in total volume in recent years.

      4. Bridging Regulatory Divergence

      Can client-centric approaches and increasing alignment between global players accelerate sustainable finance?

      There is an urgent need to adopt a more client-centric approach in sustainable finance, placing the end client at the heart of the regulatory framework. Current regulations, while aiming to clarify the landscape for investors, often use complex language and concepts that hinder clients' ability to express their preferences. The policy developments need to effectively enhance consumer protection and align with the needs of retail investors, thereby reducing the knowledge gap and fostering greater accessibility to sustainable investment solutions.

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      Read the full summary of key takaways on the Amundi Research Center