In 10 years sustainable finance has produced about 10 specialised labels. There are now two categories of labels: those based on SRI and those based on green finance (mainly on climate issues, with climate exclusions).
These labels were created in order to clarify the concept of socially responsible investment (SRI) for investors. It is nonetheless difficult for investors to navigate around all these labels, given the wide range of methods and terminologies used. Most labels are based on an independent certification guaranteeing the quality and transparency of the processes in place.
The European Commission is therefore thinking about establishing a European ecolabel as part of the implementation of its green classification system.
LuxFLAG:
Luxembourg Finance Labelling Agency
FNG:
Forum Nachhaltige Geldanlagen, the
rating agency for Germany and Austria
Nordic Swan:
Ecolabel for Nordic countries
Source: Novethic, data as of 02/12/2019
European labels Governance Awarding Type of label # of funds AuM ( bn)
S R
I
SRI Label France
An independent committee supported by the Ministry of Finances
Certified auditors ESG / SRI investment processes: ESG assessment of at least 90% of the portfolio. 20% reduction in the investment universe. Average ESG rating significantly higher than that of the starting universe.
321 121
FNG-Siegel Germany, Austria & Switzerland
A committee of experts supervised by the FNG
GNG (the FNG s labelling organisation) and the University of Hamburg
ESG / SRI investment processes with ethical and sectorial exclusions (points system) ESG assessment of 100% of the portfolio.
104 30
LuxFLAG ESG Luxembourg
LuxFLAG, an independent agency, Luxembourg financial services
LuxFLAG ESG / SRI investment processes based on a pre-set ESG strategy (e.g. best-in-universe, best-in- class, etc.). ESG assessment of 100% of the portfolio.
82 34
Towards Sustainability Belgium
Febelfin QS External auditors Application of quality standards to the portfolio: standards regarding the investment process (sustainability, transparency, disclosures, supervision and ethical and sector exclusions). ESG assessment of 100% of the portfolio.
271 125
Umwelt- zeichen Austria
Ministry of the Environment
Ministry ESG / SRI investment processes: integration of mandatory ESG criteria, meaning that less than 50% of the investment universe can be invested in. Ethical and sector exclusions.
123 15
G re
e n
Fi na
nc e
Nordic Swan Ecolabel Nordic countries
Committee mandated by the governments of Nordic countries
Nordic Swan ESG / SRI investment processes with climate exclusions and green reporting (point-based system). ESG assessment of at least 90% of the portfolio. More than 50% of the fund is invested in securities with strong ESG practices . Ethical and sector exclusions.
32 10
LuxFLAG Environment Luxembourg
LuxFLAG LuxFLAG Thematic investments and ESG criteria. Minimum thresholds at the company level (at least 20% of revenues generated in environmentally responsible businesses) and at the portfolio level (75% green companies).
9 7
LuxFLAG Climate Finance Luxembourg
LuxFLAG LuxFLAG ESG monitoring, environmental themes & climate exclusions 3 1
Greenfin Label France
Ministry of the environment and the energy transition
Certified auditors Thematic investments and ESG criteria. Climate exclusions. Distinction between three types of companies: type 1 (> 50% of revenues in environmentally responsible companies) / type 2 (between 10% and 50% of revenues in environmentally responsible companies) / type 3 (less than 10%). At least 20% of the portfolio must be made up of type-1 companies; no more than 25% may consist of type-3 companies.
36 5
ODDO BHF AM 2020
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