Towards Sustainability Quality Standard - First Biennial Revision


  • The Towards Sustainability Quality Standard is regularly revised to keep pace with the times and fulfil its ambition to move the whole financial market towards more sustainability.
  • The first revision has focussed on:
    •  aligning the Standard with the EU Sustainable Finance regulation
    •  ensuring deeper integration of sustainability in the investment process
    •  strengthening the criteria on the fossil fuels sector and on sovereign bonds
    •  improving disclosure to end investors
  • Since its launch in November 2019, more than 580 investment, savings and insurance products have been awarded the Towards Sustainability label. More than 85 financial institutions from over 10 countries are currently involved in the Towards Sustainability Initiative. Towards Sustainability is thus the most comprehensive label in the European Union in terms of product offering.
  • More than 390 billion EUR are managed in accordance with the criteria of the Quality Standard, embodied by the label. An estimated 25% of that is distributed in Belgium.
  • The Towards Sustainability label is a tool to help investors in finding a product that is in line with their personal sustainability preferences and convictions, and offers independent assurance that sustainability is well integrated in the investment process.

The Towards Sustainability label

In November 2019, the Central Labelling Agency of the Belgian SRI label (CLA) vzw/asbl awarded the first 'Towards Sustainability' labels to financial products that were compliant with the Quality Standard for sustainable and socially responsible financial products. Since then more than 580 products, including investment funds, index products, insurance funds and saving products, have obtained the label amounting to more than EUR 390 billion that is managed respecting the criteria of the underlying Quality Standard. More than 85 financial institutions from over 10 countries are currently involved in the Towards Sustainability Initiative, making it the most comprehensive and inclusive labelling initiative for sustainable financial products in Europe.

The label and the Quality Standard were developed with the objective to grow and safeguard the quality and integrity of the market for sustainable financial products on the one hand, and to provide more transparency and guidance to retail and institutional investors on the other hand.

The Towards Sustainability label explicitly positions itself as a broad sustainability label. It wants to move the market and generate impact by involving a large number of financial institutions and not only the front runners. For the same reason, it also wants to provide qualitative and credible sustainable investment solutions to a broad group of investor profiles: not only to the most convinced and dynamic profiles but also to the more conservative and defensive investors.

The Quality Standard is a normative framework that stipulates a number of criteria that a product which claims to be sustainable must at least meet. At the same time, it encourages product managers to go beyond these minimum criteria and be more ambitious. The minimum criteria concern ESG due diligence processes, sustainability policies and screening practices, exclusion of harmful activities and transparency.

The first revision

The name ‘Towards Sustainability’ is an expression of the label's philosophy of evolution and inclusion. It wants to gradually raise the level of ambition and support the transition to a sustainable economy. The idea is to leave nobody behind and to incentivise all investors, market participants and companies to join the path towards more sustainability.

A quality standard in the field of sustainability cannot be static: it must be dynamic and evolutive to keep pace with changing consumer expectations, societal needs, scientific research, data availability and new regulatory initiatives. For that reason, the Quality Standard is reviewed every two years in a multi-stakeholder context. The review process gives an opportunity to all relevant stakeholders, financial and non-financial, to express their views on the direction in which the Quality Standard should evolve.

The first revision, which goes into effect as of January 2022, aims first and foremost to align the label with the new European regulations on Sustainable Finance: esp. the Disclosure and Taxonomy Regulations. Secondly, a deeper integration of sustainability and ESG due diligence in the investment process is ensured by requiring multiple different strategies to be in place. The restrictive criteria regarding harmful sectors (e.g. weapons, tobacco, coal) have been strengthened. Regarding the fossil fuels sector, a balance is sought between supporting transition and avoiding companies that do not move fast enough. With that in mind, the criteria for this sector became stricter while leaving room for companies that can show in a credible way they are actively transitioning. For this, the Quality Standard does not just look at current operations (indicated by turnover) but also values investments in new sustainable activities (indicated by capital expenditures). Lastly, more detailed expectations are formulated for States when investing in sovereign bonds.

Bringing clarity to investors is another key objective of the Towards Sustainability label. When a financial product carries the Towards Sustainability label, the investor can rely on it that it meets a number of well-defined and independently verified sustainability criteria. In addition, the renewed Towards Sustainability website will offer more specific information on each labelled product: e.g. exposure to fossil fuel sector, carbon footprint, Taxonomy-alignment. This information enables the investor to determine whether a particular product meets his or her personal expectations about sustainability. This ‘Sustainability ID’ of each product and the website as a whole will be completely reviewed by January 2022, to become even more user-friendly and helpful. Finally, product managers are asked to publish detailed policies on a wide range of key sustainability topics on their own websites (e.g. on the energy sector, biodiversity, diversity, taxation, oppressive regimes etc).

The technical details of the revised Quality Standard can be found here.