Measuring SDR funds’ exposure to the green economy

October 23, 2025

The transition towards a net-zero economy is driving demand for scalable environmental and climate-focused solutions, creating vast opportunities for investors. As sustainability becomes central to global economic transformation, the green economy—comprising firms that deliver environmentally beneficial products and services—is emerging as a critical long-term investment theme.

LSEG Data & Analytics recently delved into the how to measure green economy exposure of SDR funds with its weighted average green revenue (WAGR).

To help investors assess how much of their portfolios are aligned with this transition, LSEG has developed the WAGR metric. This standardised and data-driven approach provides a clear picture of how much of a portfolio’s revenue is derived from green activities, enabling investors to evaluate the environmental impact and alignment of their investments with net-zero goals.

In collaboration with Jupiter Asset Management, a new report showcases how WAGR can analyse the green economy exposure of funds that carry Sustainability Disclosure Requirements (SDR) labels.

The report features two case studies illustrating how investors can use LSEG’s data to design portfolios focused on environmental and climate themes.

As of June 2025, a total of 88 funds with a combined value of $40bn have adopted SDR labels, according to the research. Of these, 58 funds are classified under the ‘Sustainability Focus’ label.

Its analysis also reveals that most SDR-labelled funds demonstrate a higher green economy exposure than the broader listed equities market. However, there is a significant range, with exposures varying from 3% to as high as 68%, and an average of around 20%.

The report emphasises that these differences highlight the importance of going beyond labels when evaluating sustainability credentials. WAGR provides a more transparent, quantitative measure that investors can use to identify genuine climate-aligned strategies.

For more insights, read the full report here.