Responsible investing

Beside institutional investors who used to be the driving force on the responsible investing market, more and more retail investors are striving to invest with impact. Their aim is no longer just to achieve a financial return, but to also generate measurable social and environmental benefits.

The asset management industry has recognised both the significant potential and opportunities this trend offers the financial sector and the positive impact that responsible investment strategies can have on the life of mankind as a whole.

Many fund sponsors are adjusting their product offering accordingly. The number of investment funds integrating Environment, Social and Governance (“ESG”) criteria into their investment processes is increasing rapidly.

In order to assess the responsible investing market, its size, its product categories and the leading domiciles for this type of fund, ALFI has commissioned a series of surveys whose findings validate its belief that the concept of responsible investing has enormous potential.

ALFI has been fostering the development of the responsible investing sector since 2006 when it participated in the formation of the Luxembourg Fund Labelling Agency (LuxFLAG), an independent, not-for-profit association whose aim is to support the financing of sustainable development by providing clarity for investors through awarding its labels to eligible investment funds. While LuxFLAG initially focused exclusively on the microfinance sector, the agency is now granting transparency labels to eligible investment funds in Environment and ESG as well.

In recognition of Luxembourg’s position as a centre of excellence in the field of inclusive finance, and in order to further foster financial inclusion worldwide, ALFI has joined the Inclusive Finance Network Luxembourg Asbl (InFiNe.lu), a national platform that brings together public, private and civil society actors involved in inclu­sive finance and based in Luxembourg. The mission of InFiNe.lu is to leverage expertise in Luxembourg to advance financial inclusion worldwide.