SFDR Article 9: Is it all about impact?

We investigate more than 1,000 investment funds that are classified under Article 9 of the EU Sustainable Finance Disclosure Regulation (SFDR). Using the G7's new typology of sustainable investments, we show that Article 9 funds pursue varying degrees of ambition: while 60 % follow an impact-oriented strategy, we identify 40 % that instead pursue a general Environment, Social, and Governance (ESG) strategy. We do not find significant differences in ESG scores between ESG-related and impact-related funds. Yet, impact-related funds have higher SDG impact scores and higher management fees. Downgraded funds that changed SFDR status, however, tend to be less focused on impact.