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.”
