Sustainable investing standards
A number of standards exist to aid investors in evaluating and differentiating between financial products described as sustainable:
- Eurosif Transparency Code
- Febelfin Quality Standard and Label
- FNG-Label for Sustainable Mutual Funds
- FNG Sustainability Profiles and Transparency Matrix
- Luxflag ESG label
- Novethic SRI & Green Fund Labels
Eurosif Transparency Code
The Eurosif Transparency Code focus on retail SRI (Socially Responsible Investment) funds in order to increase accountability to consumers. The guidelines create greater clarity for asset managers, research providers and other stakeholders. The principle driving the Code is that asset manager signatories should be open and honest, and disclose accurate, adequate and timely information to enable stakeholders, in particular retail investors, to understand the policies and practices of a given SRI fund. The Code focuses on SRI funds distributed publicly in Europe and has been designed to cover a range of asset classes. As of December 2013, more than 500 funds from over 50 signatories have adopted the Code.
Febelfin Quality Standard and Label
The Belgian Financial Sector Federation (Febelfin) developed a quality standard for sustainable financial products, with a floor (minimum norm) for all such products, and a corresponding label. All distributors and managers, domestic and foreign, of socially responsible or sustainable financial products can apply for the label.
FNG-Label for Sustainable Mutual Funds
The FNG Label guarantees that, as a minimum requirement, the exclusion criteria of nuclear power and armaments are applied and the four areas of the UN Global Compact, i.e. human rights, labour, environment and anti-corruption, are taken into consideration. The FNG quality standard also requires that transparency and process criteria be met. FNG and its subsidiary, Gesellschaft für Qualitätssicherung Nachhaltiger Geldanlagen (GNG), first awarded the label to 34 funds from German-speaking regions on 8 December 2015.
FNG Sustainability Profiles and Transparency Matrix
Forum Nachhaltige Geldanlagen e.V. (FNG) launched a (transparency) matrix as well as sustainability profiles for funds. FNG Sustainability Profiles and the FNG Matrix are guidance tools to assist investors in the selection of sustainable mutual funds. Both tools help investors and financial advisors to obtain an overview of the sustainability strategies used. This information is supplemented by general key fund data. Currently, the matrix and profiles contain over one hundred funds.
Luxflag ESG label
LuxFLAG (Luxembourg Finance Labelling Agency) is an independent and international non-profit association created in Luxembourg in July 2006 by seven public and private founding partners. The agency aims to promote the raising of capital for the Responsible Investment sector by awarding a recognisable label to eligible investment vehicles amongst others. The labels' objective is to reassure investors that the applicant invests in the Responsible Investment sector.
As of September 2019, LuxFLAG labels 158 investment products domiciliated in 5 jurisdictions (Belgium, France, Germany, Ireland and Luxembourg) and managed by 63 Asset Managers in about 14 countries including Switzerland. In addition, the agency offers 5 different labels (each with specific high standards criteria): Microfinance, Environment, ESG, Climate Finance and Green Bond.
Novethic SRI & Green Fund Labels
The Novethic SRI Label guarantees that the processes of SRI funds are both transparent and instructive for investors. In 2013, it was awarded to 104 funds. The Novethic Green Fund Label certifies that funds are environmentally beneficial and that their 'green' objectives are clearly explained. It was awarded to six funds in 2014 so far. Launched in 2013, it is the first initiative of its kind in France.
