Shortly before the Regulatory Technical Standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR) comes into force on January 1, 2023, the European ETF industry got hit by a wave of reclassifications with regard to categorization of ETFs by the respective SFDR articles. More broadly, it is not surprising that a number of promoters need to reclassify their funds and ETFs with regard to the SFDR since promoters were missing definitions and clarity on measurements that would assign a fund or ETF to one of the three respective SFDR articles. With the demand to classify their funds prior to the

The finance industry is known for its high capabilities when it comes to models which predict future developments and/or measure the quality of an issuer or product. So, it is not surprising that rating agencies, asset, and wealth managers have started to develop models and quantitative metrics to evaluate, forecast, and measure the impact of various ESG-related factors such as climate change within their portfolios with a single ratio or score. As a result, these ratios or scores are simplifying a highly complex network of different measures with the intent to make them understandable for a wider audience. Generally speaking,

As a market observer, I have seen that no other topic has got so much attention from all parts of the investment ecosystem over the course of the last three years than ESG investing. From a European perspective, it is clear that the “Action Plan on Financing Sustainable Growth” launched by the European Commission (EC) is the main driver for the increased interest from investors in ESG investing. I don’t think that ESG would still be a niche topic if the EC wouldn’t have put so much pressure on investors and fund promoters, but the launch of an action plan

A recent report from Accenture asks “Fintech – Did Someone Cancel the Revolution?” The report notes that the promise of Fintech startups to change market structure, radically improve products, and disrupt incumbent financial firms has not yet come to pass. This question comes in the wake of a decline in new Fintech startup formation. Per Figure 1, the number of Fintech startups in the US and Europe has declined rapidly since 2015 after several years of steady growth. Figure 1: Where Are the Fintech Startups Going? Sources: Atlas The Accenture report misses a key point. The Fintech revolution hasn’t been