Although much of the current focus is on Article 8 funds under the EU’s sustainable finance disclosure regulation (SFDR), Article 9 funds are already possible, as PwC Germany’s head of real asset financial services Sebastian Kreutel pointed out.
However, the potentially negative effects of creating such a fund currently outweighs the positive potential, Kreutel stated.
The complication is, “the questions you could get from lawyers asking if you have really met all the requirements you put into the prospectus to showcase that it truly is an article 9 product,” Kreutel said.
He added that there is more downside potential even from an unproved accusation of green washing than there is upside of having an Article 9 product and an Article 9 fund.
“Investors right now are not yet really demanding Article 9 products,” he added.
If there is an accusation of greenwashing, it does not mean that there really is something behind it, yet the potential negative press means having an Article 9 product is just not worthwhile yet.
“That’s why, at the moment, we unfortunately don’t really see so many Article 9 products on the real estate market,” Kreutel said.
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