Assessing the Impacts of the EU Taxonomy Regulation on Investment Funds: An Analysis of article 8 and article 9 Investment Funds in Europe, with a Focus on the Grand Duchy of Luxembourg.
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- This thesis examines the impacts of the EU Taxonomy Regulation (EU 2020/852) on investment funds classified as article 8 and article 9 under the Sustainable Finance Disclosure Regulation (EU 2019/2088) in Europe, with a specific focus on the Grand Duchy of Luxembourg. The research investigates the downgrading of funds from the article 9 category to the article 8 category, primarily attributed to the ambiguity in defining sustainable investments and concerns about greenwashing. It explores the implications for investor scepticism, the market share of article 8 and article 9 funds, and the need for clearer regulations and increased transparency. Additionally, it addresses the differing perspectives of investors, active managers, and central authorities on sustainable investments and the challenges associated with establishing standardized methods for determining sustainable activities. The thesis also examines Luxembourg's decision to exclude nuclear and gas from green products and its potential consequences for funds and investors. The overall analysis suggests that while the short-term impact remains uncertain due to various factors, there is an optimistic view regarding the medium and long-term effects, driven by regulatory pressure and consumer demand for sustainable investment options. The thesis advocates for global implementation of ESG regulations to create a meaningful impact on the future of the planet and the global economy.