Asset Class: Long-term sustainable funds attracted £4.11bn in Q1 2023, £3.81bn to equity funds, as their conventional peers took in £2.58bn. Classification: Equity Global funds were the most popular sustainable classification, netting £2.34bn, followed by US and emerging market equity. Active v Passive: Sustainable funds took more than half of passive fixed income flows despite comprising only about 10% of the market by AUM. Fund manager: BlackRock saw inflows of £3.5bn, of which £3.02bn was in equity funds.   ESG v Conventional Flows by Asset Class Chart 1: Asset Class Flows, ESG v Conventional, Q1 2023 (£bn) Source: Refinitiv Lipper

Following the news about product releases and trends in the European fund industry, one may get the impression sustainable investing is the new hot topic in the industry since there are funds with a sustainable investment objective launched every week. Some observers may already see an inflationary use of the terms environmental, social and governance (ESG) and socially responsible investing (SRI). In addition to the specialist funds, an increasing number of asset managers state they have the so-called non-financial data integrated into their research and portfolio management systems so analysts and portfolio managers can use the data within their decision-making

One of the largest hindrances for the distribution of sustainable investments (SRI/ESG) is the fact that fund promoters do not use a common taxonomy to describe their investment approaches. This different wording confuses investors and holds them back from investing, since it isn’t clear to them which approach would best suit their needs. With its sustainable finance initiative the European Commission (EC) is seeking to build a framework that fosters a more sustainable investment environment. From my point of view such a taxonomy and the resulting unified classification system are needed to accelerate the integration of nonfinancial criteria into the