Oriane Schoonbroodt is co-founder and executive director of Label R, which specifically addresses alternative investment funds (AIFs) with operations in sensitive and emerging zones where the risk is greater for investors.
“Our goal is to provide a strong and harmonised tool for funds to be able to prove that they are effectively implementing ESG, and thereby help them grow by developing good business practices, enhancing their reputation, and ensuring a long-term positive impact.”
The company was established in Luxembourg in October 2017 and has just started integrating its first clients. A former Belgian diplomat and policy advisor to the European Parliament and UN, Schoonbroodt explains that it was natural to set up Luxembourg, “not least because my project partner Serge Krancenblum, group CEO of SGG, is based here, but also because it is the second largest investment funds hub in the world, and there is a lot of energy behind ethical and impact investing.”
Label R combines Krancenblum’s financial background with Schoonbroodt’s experience in diplomacy. “We noticed many funds didn’t know how to process ESG. According to a survey released by Morgan Stanley, 84% of global asset owners claim to pursue or consider ESG investing, whereas in reality, less than 5% implement it. Behaviours have to be scrutinised in order to make the highest ethical standards the norm,” states Schoonbroodt.
Label R has a certification process that goes beyond traditional reporting practices, she says. Its impartial methodology comprises a process audit coupled with an onsite audit, and an independent reputation audit checking funds, management companies, suppliers and subsidiaries.
“Entirely separate from the client, the reputation audit is cross checked with the data obtained from the fund or the company through the process and onsite audits, providing a real verification of the internal audits.”
While many indexes and guidelines exist for public funds, Label R has been recognised by the International Finance Corporation as the only company able to provide ESG methodology for private equity funds.
It takes one to three years for a company to become certified. Label R gives investors the security that risk has been thoroughly measured at all levels. Schoonbroodt states: “No other kind of tool gives this kind of assurance to investors.”
ESG Screening
Label R has partnerships with Sqope, a financial intelligence provider, and SGS, a global inspection and testing company. Members of Label R’s advisory board include the chief investment officer of the International Finance Corporation, part of the World Bank, and a managing director at BlackRock, the world’s largest asset manager.