Since LGX first increased its scope to include socially responsible investment funds in 2018, it has featured three different fund segments dedicated to green funds, social funds and ESG funds respectively. However, to reflect new market and regulatory developments, as well as to provide more transparency to investors, the LGX fund section has been revamped and now features two fund windows: one for ESG funds and one for impact funds.
New regulatory classification system
SFDR requires asset managers to classify investment products depending on the extent to which they take ESG factors into account in the fund’s investment strategy and objectives. Asset managers need to disclose the degree of sustainability focus established for each investment fund by classifying each fund under Article 6, Article 8 or Article 9 of SFDR.
Article 6 covers funds which do not integrate any kind of sustainability into their investment process, while funds classified as Article 8 or Article 9 take sustainability concerns into account in the investment process, to different degrees.