In November 2019, the Belgian not-for-profit organisation known as the Central Labelling Agency (CLA) awarded the first SRI (Sustainable and Responsible Investment) “Towards Sustainability” labels to financial products that were compliant with the Quality Standard for Sustainable and Socially Responsible financial products.

The Quality Standard is a normative framework stipulating the criteria that financial products that claim to be sustainable should minimally meet. These criteria concern ESG (Environmental, Social and Governance) due diligence processes, sustainability policies and screening criteria, exclusion of harmful activities, and transparency. 

The Standard was originally developed at the initiative of Febelfin in consultation with stakeholders from inside and outside the financial sector. With it, the Belgian sector organisation for financial institutions aims to:

  1. Grow and safeguard the quality and integrity of sustainable financial products.
  2. Provide more transparency and guidance to retail and institutional investors.

By the end of 2021, almost 650 products, including investment funds, index products, insurance funds and saving products, had obtained the Towards Sustainability label. About 100 financial institutions from 10 countries were involved, making it the most comprehensive and inclusive labelling initiative for sustainable financial products in Europe.

The challenge

The Towards Sustainability label has the potential to lead the mainstreaming of sustainable investments in the financial sector internationally.

As the financial sector is subject to regulatory evolutions and rapidly changing trends, the Quality Standard requires a regular revision to “keep pace with the times and fulfil its ambition to move the whole financial market towards more sustainability.” (CLA)

The very first revision, a multi-stakeholder process involving financial and non-financial actors, started in the second half of 2020.

The stakes of the review process were high. It was essential for the Central Labelling Agency to guarantee the unwavering quality of the Standard and its alignment within the EU sustainable finance agenda, so it can serve as a source of inspiration for other initiatives.

The CLA turned to Sustenuto to assist with determining a comprehensive governance structure within the CLA, specifically its Advisory Commission, and to support the review process of the Quality Standard.

More specifically, we took on four key challenges:

  1. Determine the composition, role, and functioning of the Advisory Commission.
  2. Analyse the feedback of the multi-stakeholder consultations.
  3. Assist the Advisory Commission throughout the review process.
  4. Prepare a final report of recommendations for submission to CLA’s Board of Directors.

Our approach

Governance of the Advisory Commission

The Advisory Commission is tasked with providing recommendations to the CLA’s Board of Directors. To guarantee that it can properly advise on the direction that the Quality Standard should take, it was key to clearly determine the Commission’s composition, responsibilities, and functioning.

With this mission in hand, Sustenuto conducted a series of consultations with the Advisory Commission’s members to gain an understanding and collect insights on the expectations of the role and the preferred functioning of the Commission.

We subsequently proposed to amend the Terms of Reference to:

  • Include the required characteristics for future members.
  • Identify the different roles of the Advisory Commission and its interaction with other corporate bodies.
  • Specify, among others, the decision process, the appointment of new members, and the membership duration.

Multi-stakeholder feedback

In the framework of the biennial review process, the CLA had prepared a consultation document containing a set of general and more technical questions about the market of sustainable financial products, the Towards Sustainability label, and the Quality Standard. The document was sent to stakeholders from within and outside the financial sector.

Sustenuto, in cooperation with a PhD student at the University of Liège, analysed the feedback from the stakeholders and provided a comprehensive summary to the Advisory Commission for further discussion and consideration.

Facilitation and reporting

The input from the stakeholder consultation provided food for thought and served as a source of inspiration for the Advisory Commission. Throughout a series of meetings, we facilitated the review process of the Quality Standard via dedicated discussions, a thorough preparation per relevant topic, and consistent feedback.

Finally, we combined the input from the multi-stakeholder consultations with the final recommendations of the Advisory Commission. This report was submitted to the CLA Board of Directors for further consideration and for determining the instructions to the Eligibility Commission for redrafting the Quality Standard. 

The results

In the course of 2021, Sustenuto assisted the CLA with its revision of the Quality Standard of the Towards Sustainability label. The first revision focussed on:

  • Aligning the Standard with the new European regulations on Sustainable Finance.
  • Ensuring a deeper integration of sustainability in the investment process.
  • Strengthening the criteria on the fossil fuels sector and sovereign bonds.
  • Improving disclosure to investors.

The revised version of the Quality Standard went into effect in January 2022.

Olivier Marquet, Chairman of Central Labelling Agency. “With the revision of the label, we aim to maintain its quality and ensure that it continues to be a relevant guide for the investment in sustainable financial products. Thanks to the support of Sustenuto and their dedication and professionalism, the CLA’s Advisory Commission was able to successfully fulfil its tasks within a very tight time frame.” 

More information on the financial products that have received the Towards Sustainability label via