Invesco’s evolving fund range for sustainable investing – Article 8 and 9 funds

Invesco’s evolving fund range for sustainable investing

The EU Sustainable Finance Disclosure Regulation (SFDR), introduced in March 2021, set out a classification system to improve the transparency of environmental, social and governance (ESG) factors in financial products.

SFDR Classifications

The rules make it more difficult for financial firms to “greenwash” products or say they are ESG friendly or sustainable when they are not. Financial products are classed as either Article 6, Article 8 or Article 9 funds. An Article 6 classification does not have a sustainable investment objective. An Article 8 classification promotes environmental or social characteristics, while Article 9 has a sustainable investment objective.

“The SFDR is designed to help institutional and retail clients understand, compare, and monitor the sustainability characteristics of investment products by standardising sustainability disclosures,” says Maximillian Kufer, Head of ESG Client Strategy for EMEA and Global Private Markets at Invesco. “It’s intended to provide greater transparency on what criteria have been applied to products by categorising them, based on their credentials.”  

“We recognise that clients have diverse needs when it comes to investing sustainably. An Article 6, 8 or 9 designation aims to provide clarity for investors by categorising funds according to their sustainability characteristics and therefore helping investors select funds that align with their sustainability and investment objectives.”

The classifications help investors understand the sustainability focus of the funds they are considering, so they can make informed decisions about investing in them.

Since adopting the SFDR back in March 2021, we have carried out a methodical review of our product range and where appropriate, classified in-scope products as Article 8 or Article 9.1

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Article 8 funds are defined by the SFDR as “a fund which promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices”.

Managers of products must have clear information on how the environmental and social characteristics are met. If an index has been designated reference benchmark, there needs to be information on how the index is consistent with those characteristics. There also needs to be information as to where the methodology used for the calculation of the reference index can be found.

Exclusion strategies can also be used for Article 8 funds. Our exclusions framework for some of our Article 8 funds are:

UN Global Compact

  • Non-compliant

International sanctions

  • Sanctioned investments are prohibited

Controversial weapons

  • 0%, including companies involved in the manufacture of nuclear warheads or whole nuclear missiles outside of the Non-Proliferation Treaty, an international agreement focused on preventing the spread of nuclear weapons, promoting disarmament and encouraging the peaceful uses of nuclear energy.  


  • Thermal coal extraction: >=5% of revenue
  • Thermal coal power generation: >=10% of revenue

Unconventional oil & gas

  • >= 5% of revenue on each of the following:
    o Artic oil & gas exploration;
    o Oil sands extraction;
    o Shale energy extraction.


  • Tobacco Products production: >=5% of revenue
  • Tobacco-related products and services: >=5% of revenue


  • Recreational cannabis: >=5% of revenue

*Additional exclusions may also apply to some of our other Article 8 and Article 9 fund range.

Article 9 funds are defined as “products that have sustainable investment as their objective, and which invest in economic activities that contribute to an environmental objective, as evidenced by the fact that the investee companies follow good governance practices”.

Managers of products are required to provide clear and accurate information to investors about their sustainable investment objective. If a fund has an index as a reference benchmark, there must be information on how it’s aligned with the sustainable investment objective and why and how this index differs from a broad market index. If there’s no index there needs to be an explanation on how the sustainable investment objective are attained.

The investee companies in these activities must follow good governance practices, such as sound environmental management, ethical business conduct and responsible corporate governance. 

The SFDR is part of the broader European Union Sustainable finance Action Plan, which aims to mobilise capital towards sustainable investments and ensure that financial institutions and investors consider sustainability factors in their decision-making processes.

The rules impose mandatory ESG disclosures for financial market participants on how they integrate ESG into their products. It improves transparency of sustainability related products and creates a level playing field for investors to compare products and understand the impact of their investment decisions. 

Sustainable finance refers to financial activities and practices that integrate ESG factors into investment decisions, lending practices and other financial services. It seeks to align financial activities with sustainability objectives and promote the long-term well-being of both the economy and the environment.

The objective of sustainable finance is to promote a shift towards a more sustainable and resilient global economy. It encourages financial institutions, investors and businesses to consider not only financial returns but also the broader environmental and social impacts of their activities. By integrating sustainability considerations into financial decision-making, sustainable finance aims to drive positive change and contribute to a more sustainable future.  

Sustainable investing refers to an investment approach that considers ESG factors in addition to financial returns. Sustainable investing seeks to generate positive social or environmental impact alongside financial performance.

Sustainable investors evaluate companies and investment opportunities based on their performance and practices related to environmental sustainability, social responsibility, and corporate governance. Factors they consider include carbon emissions, labour practices, board diversity, community engagement and ethical conduct. 


  • 1At Invesco we continuously monitor any applicable sanctions, including those imposed by the UN, US, EU and UK. These sanctions may preclude investments in the securities of various governments/regimes/entities and as such will be included in our compliance guidelines and workflows designed to ensure compliance with such sanctions. The wording of international sanctions is something that we pay particular attention to as there are occasions where sanctions can exist in limited form, for example allowing investments in the secondary market. 

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important Information

  • Data as at 12.06.2023, unless otherwise stated.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.