“Febelfin developed a quality standard, embodied by the Towards Sustainability label, to guarantee clarity and transparency with regard to sustainable investments.

We all know that sustainability plays an increasingly important role in our society, and that consumers deem it important that the products they buy and use are sustainable and healthy. Producers and companies are aware of this and are adapting their product range accordingly.

However, it is not always easy for consumers to know whether a product is really sustainable or not. There is always a risk of greenwashing. This is also the case for sustainable financial products. Consumers increasingly want to know where their money is going, which companies are being financed, etc. In recent years, sustainable investments have become a sought-after commodity. For example, there are currently more than 2,400 sustainable financial products on the European market.

The flip side of the coin is that fund managers define “sustainability” in different ways, posing a risk of greenwashing. Moreover, it is confusing for investors, because it is not always clear to understand how and why a financial product is considered sustainable.

For all these reasons, we developed the Towards Sustainability initiative. The aim was first to define minimum requirements for sustainable financial products (the quality standard) and to provide investors with a guiding tool in their search for sustainable products. A label and a website were created for this purpose.

It is certainly not the intention that the label stands for a niche standard that only approves dark green investments and/or that only accepts investments that exclude fossil fuels. It is equally important that the certified investment products – which we hope will increase in number – are suitable for all types of investors and cover a wide range of investments.”

How does the label contribute to the prevention of greenwashing?

“One of the main reasons why the quality standard and the label were created was to prevent greenwashing. Greenwashing is detrimental to both investors and the financial sector.

It will certainly still happen, but sustainable products are receiving more and more attention from the European Union and the national regulator, the FSMA. So it should gradually disappear.

For example, we see that it has become difficult to bring so-called 'sustainable' financial products to the Belgian market if they do not carry the Towards Sustainability label.

To prevent greenwashing within the label itself, it is not Febelfin itself that supervises and assigns the labels, but the labeling agency CLA, an independent legal construction. Febelfin and the financial sector are represented in that body, but do not have a majority. Finally, supervision takes place with the support of the academic world.”

What are the next steps to stimulate investments in sustainable products?

“Febelfin will continue to make its members aware of the importance of integrating sustainability and ESG factors (social, environmental and governance-related criteria) into their investment decisions.

That really is a crucial part of the social role that the financial sector has. In this way it contributes to achieving the objectives formulated in the Paris Agreement and the Sustainable Development Goals of the United Nations.

The European Union's Green Deal also counts on the sector to finance the transition to a climate-neutral Europe by 2050.

Offering sustainable products that meet the ESG criteria helps fulfill that social role and is also a way of involving the consumer.”