Our Labels
What is a LuxFLAG Label?
A Label is a tool that a financial market participant can use to showcase the Impact or ESG characteristics of their products or services. It helps investors to identify sustainable financial products or services as it offers external independent, internationally recognized validation on compliance with best market practices. Labels, provided by LuxFLAG, bring additional value by:
- reinforcing transparency around how sustainability or impact objectives are embedded in the financial product’s or service’s investment approach
- offering clear and comparable criteria, helping investors assess the credibility of ESG and impact claims
- supporting financial institutions in demonstrating their commitment to sustainable finance, which may enhance reputational value and strengthen stakeholder trust
LuxFLAG Label Benefits
LuxFLAG Label Benefits
Applicant Fundraising Stage (AFS)
One of the unique features of LuxFLAG’s Labels is the Applicant Fundraising Stage (AFS) framework, which is specifically designed to support new market entrants. Unlike most sustainability labels, LuxFLAG does not limit its Labels to fully launched products; instead, we recognize the importance of enabling fundraising at an early stage.
Newly launched financial products or services are eligible for all the Labels to help increase their market visibility and support fundraising efforts aligned with its sustainable objectives. These financial products or services must have their prospectus formally approved — by the regulator if regulated or by the Board of Directors if not-regulated. This framework is used for the fundraising in the marketing phase.
If you would like to learn more about the Applicant Fundraising Stage (AFS) framework, how it can benefit your product, and how to obtain it, please feel free to contact operations@luxflag.org.
Application Cycle
Labelling process
Labelling process
01. Onboarding
Financial products to consult with our Sustainability Operations Team to determine eligibility. Please send your email to operations@luxflag.org.
02. Application review
- Pre-analysis
- Sample selection
- Document analysis
03. Quality Assurance & Compliance
To maintain and enhance the quality of label application reviews.
04. Label decision
- Review by the Sustainability Operations Team
- QA&C level
- CEO
- Eligibility Committees
- Board of Directors
05. Label issuance
The Board’s decision is communicated to the applicant financial product the day after the meeting.
06. Renewal
- Granted for 3-years with annual intermediary reviews
- Invite to the financial product to submit updated application documents before the label expires
LuxFLAG Label Benefits & Terms & Conditions
LuxFLAG Labels are awarded at a sub-fund/strategy/individual product level.
All Labels are awarded for a period of three (3) years and are due for renewal upon expiry. The label cycle consists in an initial review and two intermediary reviews. The fees are respectively 6,000 euros and 3,000 euros per Applicant.
The Label is valid for three (3) years, starting from the first day of the month following Board approval to the last day of the thirty-sixth month. During this period, LuxFLAG conduct three key reviews to ensure ongoing compliance:
- Year 1: Initial review (the “Initial review”)
The initial review requires the Applicant to complete the questionnaire and submit it with all the required documents mentioned in the checklist (last tab of the application questionnaire).
- Years 2 & 3: Annual intermediary reviews
These reviews require the completion of a limited questionnaire focused on the changes in the financial product or services since the completion of the first questionnaire. An updated portfolio and recent reports must be given, along with any policy or prospectus that has changed since the last review.
Applicants interested in obtaining a LuxFLAG Label can consult the Sustainability Operations Team to review the Label’s eligibility criteria and discuss the key features of their products or services.
The Applicant can contact the Sustainability Operations Team by emailing operations@luxflag.org to ask any questions about the Labels and to initiate the application process.
The Application Package is the same for each type of Label. The following documents are required for the initial review:
- Subscription form – this form is the agreement between the Applicant and LuxFLAG to apply for a specific Label
- Application questionnaire – this is a structured excel document used to gather comprehensive information about the Applicant applying for the Label
- Supporting documents – such as legal documents, financial and non-financial reports, policies and procedures, etc.
ISAE 3000 Type II certification
In 2019, LuxFLAG became the first sustainable finance labelling agency in Europe to obtain the ISAE 3000 Type II (International Standard on Assurance Engagement) certification.
Since then, LuxFLAG has annually obtained the renewal of this certification. This certification underscores LuxFLAG’s commitment to maintaining rigorous standards for its processes and services related to issuing labels to Sustainable Finance investment vehicles.