Wealth and asset managers are the stewards of capital for every major sector and asset class, with €27 trillion under management across Europe at the end of 2021’s first quarter1. If the financial industry is uniquely placed to accelerate the global transition to a fair and sustainable future, then wealth and asset managers have an especially important role to play in putting pressure on businesses to advance sustainability and move away from carbon intensive activities. Tracking the sustainability commitments of Europe’s wealth and asset managers not only helps us to monitor the sector’s own progress, it also gives us an insight into the advancement of the sustainability agenda across the broader economy.
EY’s Sustainable Finance Index aims to accelerate the transition to a better future by tracking financial institutions’ progress against a broad set of sustainability parameters. Transparent benchmarking allows for empirical comparisons at the firm, sector and country level as well as helping to define goals, identify best practices and target areas for improvement. With many asset managers calling on corporates for greater sustainability disclosures, it is important they themselves establish leading practice.
In this article, we focus on publicly listed wealth and asset managers in four of Europe’s more mature markets: France, Germany, Switzerland and the UK. While this does not capture the whole of the asset management market – such as the asset management divisions of large banks or insurers, or privately held firms – it offers an important window into the sector, due to the greater transparency and disclosure of listed firms.
The industry’s concentrated nature means that these countries represent around three quarters of European firms’ assets under management (AUM)2. The Index reveals that, while outperforming their global peers, European asset managers often lag their counterparts in banking and insurance. However, the Index also highlights opportunities for asset managers to use their unique resources, and build on incoming regulations such as the EU’s Sustainable Finance Disclosure Regulation (SFDR) and the evolving demands of investors to make rapid improvements in ESG implementation and disclosure. Walking the talk on sustainability is both a moral responsibility and a burgeoning opportunity for Europe’s wealth and asset managers.