Sparinvest is delighted to have been successful in renewing its LuxFLAG ESG Label for the fund Sparinvest SICAV – Ethical Global Value and in getting approval on first application for an ESG Label for Sparinvest SICAV – Ethical Emerging Markets Value, one of the first Emerging Markets funds to obtain such a label.
We were asked recently why we found it useful/important to obtain the LuxFLAG ESG label for our funds.
We think that it provides reassurance to our clients that we are happy to be transparent about what we are investing in (and how we do it) and happy to have this held up to scrutiny by an Eligibility Board made up of senior figures from the European ESG research industry. We think this reassurance is perhaps particularly valuable to investors with an ethical approach when investing in Emerging Markets.
In a process that is rigorous but at the same time quite user-friendly (and not prohibitively expensive), any fund applying for the LuxFLAG ESG label not only has to be approved by the Eligibility Board, it also has to undergo an independent annual control underpinned by an external audit firm review to ensure that it retains the high standards of ESG integration expected of it. We find this a very credible approach, providing smaller investors with the same kind of level of due diligence that institutional investors get by employing consultants, and at the same time impressing institutional investors when they see it.
The primary objective of the LuxFLAG ESG Label is to reassure investors that the Investment Fund actually invests their assets in an investment fund which incorporates ESG considerations throughout its investment process. The eligibility criteria for the ESG Label require applicant funds to screen 100% of its invested portfolio according to one of the ESG strategies and standards recognised by LuxFLAG.