The 12th edition of Vigeo Italia report “Green Social and Ethical Funds in Europe”, recognised as one of the European reference studies on SRI, offers a general outlook on SRI mutual funds in Europe.

1. Green, Social and Ethical
Funds in Europe
2012 Review
December 2012
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2. Table of contents 2.
Key findings
Analysis
• Number of SRI funds
• Assets under management
• Market share
• 10 largest green, social and ethical funds in Europe (by AUM)
• Breakdown by asset class
• Top performing SRI funds
• Top holdings in portfolios
• Conclusions
About this report
• The research
• Objectives
• Use of this report
• Definitions
• Funds not taken into account
• Funds domiciliation and coverage
About Vigeo

3. 3.
— Key findings

4. Socially responsible investing:
2012 key data and trends 4.
There were 884 SRI retail funds in Europe at the end of June 2012.
Following a 3 year period (2007-2010) of impressive growth in the
number of SRI retail funds, the market has entered in a consolidation
phase that was confirmed again this year.
However, assets under management continued to grow (+12% in
2012) and reached almost € 95 bn at the end of June 2012.
This represented 1.6% of the overall retail funds market, a slightly higher
proportion than in 2011 (1.4%).
France was the most dynamic market for SRI retail funds, in terms of
AUM growth, while the increase in other countries was only moderate
or even negative.
The 3 largest funds are all French and operate in the money market.
They are provided by BNP Paribas Asset Management (BNP Paribas Mois),
Amundi AM (Amundi Tréso ISR) and Natixis AM (Fonsicav).

5. 5.
— Analysis

6. Number of SRI retail funds in Europe 6.
+29%
+27%
Source: Vigeo (2012)

7. Number of SRI retail funds per country 7.
Source: Vigeo (2012)

8. Net change of SRI retail funds per country 8.
Source: Vigeo (2012)

9. Number of SRI retail funds in Europe 9.
At the end of June 2012, there were 884 green, social and ethical funds
domiciled in Europe.
• For the third year in a row, the market has been in a consolidation phase,
following record growth over the 2007-2010 period.
France, Belgium, the United Kingdom, Switzerland and Germany account
for 82% of total SRI retail funds.
• Amongst the most developed markets, only the Netherlands and France
recorded an increase in number of funds offered to retail investors,
respectively with a +19% and a +15%, confirming past trends.
• All other countries showed a stable (Austria) or negative evolution in the
number of SRI retail funds offered.

10. Assets in the SRI retail funds industry 10.
+12%
+12%
Source: Vigeo (2012) +41%

11. SRI funds’ assets per country 11.
+31%
+19%
Source: Vigeo (2012)

12. SRI retail funds’ assets in Europe 12.
Source: Vigeo (2011)
Source: Vigeo (2012)

13. SRI retail funds’ assets in Europe 13.
SRI retail funds’ assets continued their growth: +12% for the second year in
a row, reaching almost €95 bn.
Trends per country are mixed:
• France shows by far the strongest growth (+31%), followed by the
Netherlands (+24%) and Germany (+18%).
• SRI assets growth was moderate in the United Kingdom (+11%) and Sweden
(+5%) whilst other countries experienced a decline in SRI assets (-1% in
Austria, -8% in Belgium, -15% in Switzerland, -16% in Italy and -36% in
Spain).
The five largest markets (France, UK, Switzerland, Belgium and Germany)
confirm their leadership, accounting for 83% of European assets.
• France was confirmed as the largest European SRI retail market (44% of the
total) and is characterised by a high proportion of fixed income funds.
• The UK remained in second place (14%), well ahead of other countries.
• The share of the Belgian, Swiss and Dutch markets has slightly decreased.

14. Share of SRI funds in the European retail
funds market 14.
Source: Vigeo (2012)

15. Market share of SRI funds in selected
countries 15.
Source: Vigeo (2012)

16. Market share of SRI retail funds 16.
In aggregate, SRI funds represented 1.6% of the overall European retail
funds market*, a slightly higher proportion than in 2011 (1.4%).
Belgium retains the highest country market share for SRI retail funds (8.9%).
This year, the fastest growing penetration was seen again in the
Netherlands with a market share progressing from 5.1% to 7.4%.
• This positions the Netherlands firmly in 2nd position behind Belgium, in
terms of penetration of SRI funds in the retail funds market.
* % of total UCITS assets in Europe – cf slide 29

17. The size of green, social and ethical funds:
average and median 17.
The average size of SRI retail funds has increased from €95 million to
€107 million, showing a moderate increase (+13%) for the third year in a
row:
• The average size has increased in all countries, except in Austria (-1%),
Italy (-3%), Switzerland (-8%) and Spain (-27%),
• On average, SRI funds are larger in France (€ 166M), followed by the
Netherlands and UK (€ 148M) and Italy (€ 144M),
• Fixed income (bonds and money market) funds are the largest on
average (€245M), compared to equity funds (€106M) and balanced
funds (€82M).
The median size of funds (€32 million vs €31 million in 2011) is still
much lower than the average in almost all countries, showing that all
domestic markets remain concentrated around a few leading funds.
• This is slightly different for the Netherlands (median of €113M vs mean
of €148M), whilst it is particularly true in countries with large fixed
income funds, like France (median of €34M vs mean of €163M) and
Austria (€21M vs €85M).

18. 10 largest green, social and ethical funds in
Europe (by AUM) 18.
Ranking Ranking Asset Management Assets
Fund Name Country
June 12 June 11 Company €M
New BNP Paribas Asset
1 BNP Paribas Mois FR 4,995
Entry Management
New
2 Amundi Amundi Tréso EONIA ISR FR 4,852
Entry
Natixis Asset
3 2 Fonsicav FR 2,685
Management
New
4 Macif Gestion Macif Court terme ISR FR 1,695
Entry
OFI Asset
5 4 Ofi Trésor ISR FR 1,531
Management
Friends Provident
6 3 Stewardship Pension Fund UK 1,407
Pensions
New
7 Amundi Atout Euroland FR 1,405
Entry
New
8 Amundi Atout France FR 1,289
Entry
Natixis Impact Aggregate
9 7 Natixis AM FR 1,208
Euro
New Edmond de
10 EdR Tricolore Rendement FR 1,087
Entry Rothschild AM
Source: Vigeo (2012)

19. SRI retail funds: breakdown by asset class 19.
Source: Vigeo (2012)

20. SRI retail funds: breakdown by asset class 20.
Equity funds (49% of the total) continue to outweigh fixed income funds
(40%), but to a much lesser extent than five years ago (67% vs 20% in
2007).
• This declining trend results from lower stock market valuations combined
with a general shift in asset allocations towards more prudent and
conservative instruments.
The breakdown of SRI funds by asset class varies greatly across Europe:
• The share of equity component is prevalent in Sweden (85%), the UK (76%)
and the Netherlands (69%),
• Fixed income funds are more prominent in Austria (78%) and France
(62%).
By number, equity funds still account for the vast majority (419 funds, i.e.
47%), followed by fixed income and balanced funds (149 and 120
respectively).

21. Top performing SRI funds in Europe 21.
The next table lists the top 5 funds based on one-year performance and
compares funds returns with their peer groups average.
The table does not aim to give information about fund managers abilities, as
the ranking includes funds investing in different financial instruments/markets
whose performances cannot be therefore compared.
The table gives a general indication of the best performances achieved by
European SRI funds during the last 12 months.
By price the Europe Flex-Cap Equity funds classify as the most expensive (TER
3.65% on average), while the Euro Money Market - Short Term category
emerges as the cheapest (0.25%).

22. Top performing SRI funds in Europe
(one-year returns, end of September 2012) 22.
1y 1y
Asset Management
Fund Name Country Category Fund Cat
Company
Perf Perf
Sweden Large-
Eldsjäl Fond AB Eldsjäl Sverigefond SE 37.9 32.3
Cap Equity
Sweden Large-
Eldsjäl Fond AB Eldsjäl Gåvofond SE 37.7 32.3
Cap Equity
Handelsbanken Handelsbanken Sweden Large-
SE 36.2 32.3
Fonder AB Sverige Index Etisk Cap Equity
db x-trackers S&P U.S. US Large-Cap
db x-trackers LU 34.7 30.6
Carbon Efficient Blend Equity
SNS
SNS Amerika US Large-Cap
Beleggingsfondsen NL 34.6 30.6
Aandelenfonds Blend Equity
Beheer B.V.
Source: Vigeo (2012), elaboration on Morningstar data; returns calculated using Euro as base currency.

23. Top holdings in SRI retail fund portfolios
(as of June, 30 2012) 23.
Ranking Ranking Ranking Ranking
Company Country Company Country
June 12 June 11 June 12 June 11
1 8 Sanofi FR 11 New Entry Unilever NL
2 2 Vodafone Group UK 12 12 Schneider Electric FR
3 20 Total SA FR 13 7 HSBC Holdings UK
4 9 BNP Paribas FR 14 15 Hennes & Mauritz SE
5 1 BG Group Plc UK 15 13 Allianz DE
6 6 Roche Holding CH 16 New Entry Eni SpA IT
7 5 Novartis CH 17 10 Siemens AG DE
8 3 Nestle SA CH 18 18 Basf DE
9 14 Danone FR 19 New Entry GlaxoSmithKline PLC UK
10 17 Sap DE 20 4 ABB Ltd CH
Source: Vigeo (2012), elaboration on Morningstar data.
Companies included in the 2011 top holdings, that no longer feature in the ranking are:
Ericsson, Nordea Bank and Saint-Gobain.
The table above displays the stocks that are most frequently selected by the funds
considered in this study. However, the ranking should not be construed as an ethical
ranking; the inclusion and weight of each stock also results from fund managers financial
assessment. Changes in the funds’ investment policies may also affect the results.

24. Conclusions 24.
In terms of assets under management, the European SRI retail funds
market continued to grow over the 12 months to June 2012 but remains a
niche market.
It is likely that the financial crisis has hampered SRI investment growth,
resulting in only slight increases in AUM and a reduced number of funds.
The significance of the SRI retail market varies from country to country,
driven by different factors:
• Legislative drivers (as in the Netherlands and Belgium, where investments
in controversial weapons are or will soon be prohibited by law, or in
France, where asset managers have to disclose how they integrate ESG
factors),
• Market maturity (France),
• Conversions and mergers of existing funds (France, Sweden).
Distribution networks still have an key role to play in the marketing and
sale of SRI funds to individual investors, to better promote the sustainable
and responsible investment approach.

25. 25.
— About this report

26. The research 26.
Since 1999, this is the 12th edition of the report Green, social and
ethical funds in Europe, a publication that has rapidly become a
benchmark in the field of SRI in Europe.
This report was prepared
by
in cooperation with
Simonetta Bono, Giovanni Familiari and Federico Pezzolato put
together the data.

27. The objectives of the research 27.
The research questions for the report can be summarised as follows:
• What is the size of the assets under management in green, social and ethical
funds in Europe?
• How many funds are available to the retail market?
• What are the top holdings for these funds?
• What are the country-specific approaches to socially responsible investing?
• How much does it cost to invest in these funds? How have they performed
relative to their traditional peers?
• What are the main trends of the industry and what can we expect in the future?
The key objectives of this continuous research on SRI funds in
Europe are:
• To provide professionals, the media and the general public with key figures
and trends for green, social and ethical funds in Europe
• To provide high quality services to SRI professionals, CSR managers with
companies and financial advisors

28. Use of this report 28.
This report is intended to serve the following users:
• Managers of financial institutions already engaged in socially responsible
or ethical investing,
• Managers of financial institutions that are considering incorporating
social screening in their portfolios or launching green or ethical funds,
• Managers of corporations willing to improve their understanding of
trends in socially responsible investing,
• Policy makers who are interested in identifying appropriate policy
instruments to stimulate financial institutions and business managers to
address issues related to social responsibility.

29. Definitions 29.
The report covers green, social and ethical funds operating in Europe as
of June 30, 2012. The analysis covers: Austria, Belgium, Denmark, France,
Germany, Italy, Luxembourg, Norway, Spain, Sweden, Switzerland, the
Netherlands and the United Kingdom.
The funds considered in this report:
A fund has to • All use ethical, social or environmental screening for stock and bond issuers
meet all these
conditions in selection,
order to be • All are marketed as socially responsible investment products,
eligible for the
analysis
• All are available to the public (retail funds).
UCITS is used in the same sense as for The European Fund and Asset
Management Association (EFAMA) Statistical Releases: publicly offered
open-end funds investing in transferable securities and money market
funds. However, the data are not fully comparable, as this report includes
some life insurances and pension funds complying with our definitions
and some of the countries (even if with a marginal weight on the total
assets managed in Europe) considered in EFAMA statistics are not
considered by this research.

30. Funds not taken into account 30.
Therefore the research does not take into account:
• Funds that simply donate a part of their commissions or profits to
charitable or other “good” causes,
• Funds and other investment products available to institutional investors
only,
• Funds applying one or multiple CSR screens that are not marketed as
socially responsible products.
According to these definitions, funds that have significantly
diluted their screening approach have been deleted from the
panel.

31. Fund domiciliation and coverage 31.
When reading this report it is important to consider the method applied
for the allocation of products to countries. To avoid double counting, the
survey takes into account the country where the asset management firm
is based e.g. when a fund is domiciled in Switzerland and also sold in
Germany, it is considered to be a Swiss fund. This approach can create a
bias when assessing the size of a national market (that does not
correspond to the assets managed by domiciled funds). Luxembourg
SICAVS have normally been allocated to the country where the parent
company of the fund retailer is located.
While Vigeo has done its best to cover all the funds in a comprehensive
manner, some funds may have been missed. More funds could have been
launched since the collation of the information for this report. While there
are some limitations in this research, the report and the database provide
a reliable picture of the size of the market, of the diverse situation in
various European countries, of the approach to fund management, and of
the criteria used.

32. 32.
— Vigeo

33. Vigeo 33.
Vigeo is a gateway to investment insight on the long-term risks and
opportunities facing investors.
Vigeo, the leading European expert in the assessment of environmental,
social and governance (ESG) risk factors, facing today’s companies,
institutions and countries. Through its 15 year heritage, Vigeo has
established a reputation for rigorous and in-depth ESG research, centred
on core and sector-specific drivers of sustainable performance and risk
mitigation.
Vigeo measures companies’ performance on ESG criteria and identifies
related risk factors with regard to six areas: Environment, Human Rights,
Human Resources, Community Involvement, Business Behaviour and
Corporate Governance.
The Vigeo team comprises 100 employees of 14 different nationalities
and is present in Paris, Brussels, Milan, Casablanca, London and Tokyo.
150 clients and partners worldwide use Vigeo research and services.

34. 34.
Simonetta Bono
Business Development Manager
T: +39 02 27 72 71 40
simonetta.bono@vigeo.com
Federico Pezzolato
Senior CSR auditor & consultant
T: +39 02 27 72 71 32
M: +39 392 98 63 335
federico.pezzolato@vigeo.com
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