Luxflag has launched a “social impact label” for investment funds “that strategically contribute to positive, measured and managed social outcomes.”

The agency said the label’s methodology is structured around four themes: recognising investment products “with a majority of assets aligned to foster decent work, improve living standards, and support inclusive and sustainable communities, while avoiding or mitigating negative impact;” ensuring “assets are selected based on their contribution to key social impact themes” backed up by data; transparency with stakeholders; and “comprehensive social safeguards and exclusionary criteria [that] ensure investments meet the highest ethical standards.”

“At Luxflag, we believe that responsible finance has the power to transform communities and lives,” , its CEO, in a press release on 12 February 2025. “The social impact label underscores our commitment to positive, measured and managed change in the world.”

The Luxembourg Finance Labelling Agency (Luxflag), founded in 2006, is the grand duchy’s labelling agency that checks financial firms’ responsible investing claims. It is a public-private partnership backed by eight organisations that aim to instil investor confidence in responsible investments.

The total number of financial products carrying a Luxflag label , although assets under management collectively rose slightly.

Last year, Delas that the labelling agency faced tightening budgets at financial firms and increased competition from rival labelling agencies. In response, the organisation the validity of its labels and said it would expand its product lineup.

Its label line-up already included ESG (environmental, social and governance criteria), sustainability and other verifications of investment fund and insurance products.