Sustainable Finance Disclosure Regulation: the AMF publishes a study on classifications and fossil fuel exposure in the French funds universe

The AMF publishes a first overview of the breakdown of the French fund market along the classifications introduced by the European Sustainable Finance Disclosure Regulation (SFDR), nine months after its entry into application. This assessment covers 10,616 French collective investment schemes, representing assets under management of more than €1.9 trillion at end-2021. The classification of French funds is then analysed in light of their portfolios' exposure to fossil fuel industries and developers for the four main asset classes: equity, bond, diversified and money market funds. As it is based on data at end-2021, the study does not take into account subsequent reclassifications made by some funds.

The proportion of funds classified as Article 8 and 9

At the end of 2021, one-fifth of French funds, i.e. 1,963 funds representing half of the total French assets under management, promoted sustainable characteristics (Article 8 funds) or pursued a sustainable investment objective (Article 9 funds). The former group alone accounts for over 47% of total French assets under management. Article 9 funds represent 3% of the total assets and are relatively more numerous among equity funds.

Results on exposure to fossil fuels industries and developers

Article 8 and Article 9 equity funds have a lower exposure to fossil fuel industries than their Article 6 equivalents. The results are far less clear-cut for the other fund types and the difference in exposure to fossil fuel sectors between Article 8 and Article 6 funds is hardly ever significant in the statistical sense of the term. Exposure to coal developers is concentrated in diversified funds and appears to be low, particularly for Article 8 funds, and negligible for Article 9 funds. Exposure to oil and gas developers is more significant but remains limited. Moreover, Article 8 funds rarely differ significantly from Article 6 funds. These results suggest that the definition of Article 8 funds is probably not very discriminating and support the AMF's proposal to introduce minimum environmental criteria that financial products should comply with in order to be classified as Article 9 or Article 8 under the SFDR.