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Greenlabelling: How valuable is the SFDR Art 9 label?

Author

Listed:
  • Bernd Scherer

    (EDHEC Risk Institute)

  • Milot Hasaj

    (Hauck Aufhäuser Lampe Privatbank AG)

Abstract

Do SFDR Art 9 funds induce more significant inflows than Art 8 funds? Using the industry-wide reclassification of SFDR labels in 2022 as a natural experiment, we find statistical evidence that SFDR labels matter in attracting flows. We see a substantial and statistically significant effect of, on average − 10.27% reduced flows in the immediate month following reclassification. After this adjustment, there is no difference in flows between old and new Art 8 funds (i.e. those recently reclassified from Art 9). Virtually all funds became Art 8. Our results confirm the regulator's view that SFDR labels help to channel capital flows into greener funds. They also support the commercial hopes of the asset management industry for attracting flows into ESG investment products.

Suggested Citation

  • Bernd Scherer & Milot Hasaj, 2023. "Greenlabelling: How valuable is the SFDR Art 9 label?," Journal of Asset Management, Palgrave Macmillan, vol. 24(7), pages 541-546, December.
    • Handle: RePEc:pal:assmgt:v:24:y:2023:i:7:d:10.1057_s41260-023-00319-y
    DOI: 10.1057/s41260-023-00319-y
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    References listed on IDEAS

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    1. Itzhak Ben-David & Jiacui Li & Andrea Rossi & Yang Song, 2022. "What Do Mutual Fund Investors Really Care About?," The Review of Financial Studies, Society for Financial Studies, vol. 35(4), pages 1723-1774.
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    Cited by:

    1. Auzepy, Alix & Bannier, Christina E. & Gärtner, Florian, 2024. "Looking beyond ESG preferences: The role of sustainable finance literacy in sustainable investing," CFS Working Paper Series 719, Center for Financial Studies (CFS).
    2. Scheitza, Lisa & Busch, Timo, 2024. "SFDR Article 9: Is it all about impact?," Finance Research Letters, Elsevier, vol. 62(PA).

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    More about this item

    Keywords

    SFDR reclassification; Fund flows; Staggered intervention analysis;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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