Towards Sustainability

The Label Towards Sustainability, one of the most widely used labels in Europe, aims to assure investors that certified products are socially responsible and not subject to unsustainable practices.

Generalities

ARGUMENT	DESCRIPTION
Label	Towards Sustainability
Nationality	Belgium - English
Management	Label managed by the Central Labelling Agency - a Belgian non-profit association.
Label type	SRI
Website	https://www.towardssustainability.be/en/quality-standard
Market	The label addresses both the Belgian market, where it covers banking, insurance and mutual fund products, and the European market (mutual funds).
Products	696 at the end of June 2022
Links to funds	https://www.towardssustainability.be/en/Investment-Product
Criteria	https://www.towardssustainability.be/en/node/1021
Periodicity	annual

Detailed data

ARGUMENT	DESCRIPTION
Description	The Label Towards Sustainability, one of the most widely used labels in Europe, aims to assure investors that certified products are socially responsible and not subject to unsustainable practices.
Genesis and development	The Label was created in 2019 in order to define a minimum sustainability content for funds claiming to be SRI. The initiative was spearheaded by Febelfin, the trade association of finance professionals in Belgium, in agreement with a group of financial and civil stakeholders Society with the aim of qualitatively and quantitatively raising the level of socially responsible and sustainable financial products, and to extend its principles to traditional financial products
Objectives	The label, through a choice of minimum and certified selection criteria, aims to instil confidence and reassure investors that labelled financial products are managed as socially responsible investments and are not exposed to unsustainable practices; it intends to demonstrate in a transparent and pragmatic way how financial performance and a high standard of social performance can be reconciled.
Promoters and administrators	The label Towards Sustainability is administered by a non-profit association, the Central Labelling Agency (CLA), which is responsible for assessing applications for certification and which aims to broaden the impact and substance of sustainable savings and investment, and to strengthen the industry's quality management processes with regard to sustainable investments.
SRI approach	A financial product can be considered socially responsible and obtain the label if, in addition to applying strategies to exclude assets considered to be unsustainable, it practises a comprehensive ESG integration approach, adding at least one of the following 4 strategies: Best in Class, Regulatory Screening, Thematic Approach and Impact Investing.
Mandatory Criteria	Five principles must be respected: 1) an integrated approach to sustainable investment (at least 3 sustainability strategies must be active), 2) Exclusion criteria (the fund must monitor compliance with the Global Compact and exclude weapons, tobacco and fossil and nuclear energies), 3) transparent communication of its policy regarding controversial societal issues (biodviersity, tax evasion, non-free countries ...), 4) transparent public disclosure of its ESG policy on a detailed public website and 5) acceptance of the principle of a periodic review of its performance by an independent third party.
Additional criteria	The fund has ample room for manoeuvre to manage the various ESG strategies. In addition to the two mandatory strategies (ESG Integration and Exclusions), the following are encouraged: 1) Best in class / positive screening approaches; 2) Regulatory screening (international conventions and treaties), 3) Thematic approaches; 4) Participatory approaches (engagement) and 5) Impact approaches (socially useful investments / aligned with the UN SDGs).
Allocation process	In order to obtain the label, Society wishing to apply must contact the CLA directly from which they will receive the "Application Package" containing the necessary information for the labelling process (necessary documentation, fee, official text of the QS and technical information and requirements). Subsequently, they must renew the submission annually and accept a periodic audit by a certification body.
External certification	Each fund is annually certified after a review process carried out by the external certification body appointed by the CLA ("certifier") to establish continued compliance with the label criteria.
Focus on transparency	The label provides for the communication of all fund management attributes on a public site linked to the label, which is promptly updated in the event of significant data changes (https://www.towardssustainability.be/en/Investment-Product).
Focus on periodic checks	Compliance with the Quality Standard is to be assessed by a qualified independent third party every year. The choice of certification body (currently Forum Ethibel (a non-profit association active in sustainable finance since 1990) and the Universities of Antwerp and the Management School of Brussels).
Related parties	The Label appoints independent auditors who verify the correctness of the claims and the alignment of the product with the required quality standards. Currently, Forum Ethibel, ICHEC (Brussels Management School) and the University of Antwerp are the external certifiers.