French Government Creates ESG (Environmental, Social and Governance) Labels for Financial Products

Observers of the U.S. Impact Economy might want to take a look across the Atlantic to France for some interesting developments.

Recently, the French Government created two official product labels for financial products. In order to qualify for the labels, financial products must meet criteria set by the nation’s Finance Ministry. According to Novethic, a Paris-based Impact Economy media and research center, “a fund must exclude 20% of its initial investment universe on the basis of ESG criteria, and the average ESG rating of a portfolio must be higher than the rating of the benchmark index used to measure its financial performance.”

French Finance Minister Michel Sapin said the goal of the product labels is “to bring about compliance with a set of criteria aimed at making economic performance compatible with positive social and environmental impacts through the financing of companies and public entities that contribute to sustainable development, whatever their activity may be.”

Click here to read more about the new French financial product labels in Novethic.