Investment strategies that target environmental, social or governance criteria (ESG) remain a large factor in the Austrian retail funds market. Where advertisements use such criteria, they also observe them “Greenwashing” has yet to be determined among Austrian investment funds to date. This is a finding of a new market study by the Austrian Financial Market Authority (FMA) about sustainability-related retail funds.
The analysis shows: As of 30.09.2025, 493 Austrian retail funds took sustainability or ESG-related characteristics into account when investing – with a total net asset value or €76.0 villion and a 61% market share of the total assets invests in retail funds. Of these, 169 funds with assets totalling €34.9 billion explicitly contain sustainability-related terms in their fund name.
Stabilisation following growth in sustainable funds
Following significant growth in recent years, the share of sustainable funds has stabilised at a high level. Strong net inflows of funds have been a significant driver in recent years. However, the momentum slowed significantly in 2025: While clear inflows were observed until 2023, and again from 2024, during the third quarter of 2025, there were slight net outflows of funds in this segment. This indicates a phase of stabilisation following years of dynamic growth.
Greenwashing as a focus for supervision
The risk of “greenwashing” also grew due to the success of sustainable funds: The terms describes the practice of portraying products, such as funds, to be more sustainable than they really are, for example by using terms that sound ecological and which only fail to clearly or appropriately reflect their real sustainability profile.
The FMA conducts targeted supervisory activities for reviewing disclosures and compliance with the disclosed investment strategy. A greenwashing analysis framework developed in-house, which also uses automated text analysis methodologies and artificial intelligence (AI) helps the FMA to identify potential cases at an early stage and to address them.
Transparency and Consumer Protection
The study shows that the more sustainable a fund is declared and described as, the more sustainable its investments also are. In particular funds beating the Austrian Ecolabel (UZ49) are required to meet strict sustainability standards. The analysis also shows that sustainability-oriented funds in the Austrian market overall have a very low exposure to the weapons and defence segments. Regarding this issue, the European Commission has determined that no general contradiction exists between the EU sustainability framework and investing in weapons and defence. However, funds bearing the Austrian Ecolabel are generally not permitted to invest in these segments.
The study shows in practice that investments of sustainable funds in the weapons and defence segments in Austria are currently not an issue: the more sustainable a fund is declared to be, the lower the invested exposure in these segments also are.
Further information and the full study may be found in the FMA website under Market Reports on Sustainability in Investment Funds.
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