Since 1 January 2022, market participants need to disclose the Taxonomy alignment of investments for article 8 and 9 funds under SFDR with regard to economic activities that contribute to the environmental objectives of climate change mitigation and climate change adaptation according to the Taxonomy Regulation. Prior to the implementation of this requirement, the CSSF had established a fast-track procedure to facilitate the update of the relevant disclosures to investors. ALFI engaged in a dialogue with the CSSF on the challenges and questions that arise for the investment fund industry in this context. In line with one of ESMA’s priorities to promote transparency, as set out in their Roadmap on Sustainable Finance 2022-2024, ALFI will continue to support its members on questions regarding the implementation of transparency requirements. In addition, ALFI will continue to act as a voice for its members on other important topics, such as the sequence of regulatory timelines, data gaps or shortcomings in methodologies and standards.

With regard to data exchange, a dedicated ALFI working group commented on the work of FinDatEx on the European ESG Template (EET) that aims to facilitate the exchange between manufacturers and distributors on ESG-related information. It serves as a cross-sectoral template and takes into account the current requirements under SFDR and the Taxonomy Regulation, as well as the IDD and MiFID Delegated Acts on sustainability. The EET can be used on a voluntary basis and is free of copyright for the benefit of the industry. FinDatEx recommends that product manufacturers deliver the EET from 1 June 2022.

The ALFI Q&A Reduced subscription tax for EU Taxonomy-compliant investment funds provide ALFI members with insights into the practical implementation of the Luxembourg law of 19 December 2020 on the State revenue and expenditure budget for the financial year 2021. The document was issued in February 2022 by the ALFI Tax Committee in collaboration with the ALFI Responsible Investing Committee. Please also refer to the tax section of this annual report.

Furthermore, the ALFI Responsible Investing working groups responded to nine consultations at both European and international level from mid-2021 until April 2022.

In July 2021, ALFI released the first edition of its European sustainable funds study commissioned from Morningstar and Zeb. It is a snapshot of the recent investment and regulatory trends in sustainable funds in Luxembourg and other European fund domiciles. It shows that in 2020, Luxembourg was the leading domicile, with sustainable funds accounting for EUR 371 billion and capturing 44% of total net flows across all European domiciles. The work on the second edition of the study has recently started.

In line with the ALFI Ambition 2025, ALFI is committed to developing sustainable finance education for the fund industry and investors and therefore continues to support various educational programmes, such as the Sustainable Finance Certificate of the University of Luxembourg, currently running for the second time.

Désirée Doenges, Senior Legal Adviser