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New European sustainable funds rating agency launched

Initiative from Liechtenstein government

A new European not-for-profit sustainable fund rating agency has been launched with its headquarters in Germany and Liechtenstein, the German-speaking principality.

Liechtenstein has launched the new body – called the Carlo Foundation – with its banking association. The German backers are MAMA AG, a sustainability consultancy, and Deutsche Umweltstiftung, an environmental foundation. It will be located in Liechtenstein’s capital Vaduz and Berlin.

The aim of the agency is to increase the transparency of sustainable investment products as well as to promote understanding of – and interest in – sustainability among investors.

Liechtenstein government spokesman Klaus Tschütscher said its backing of Carlo was a “clear sign” of the Principality’s commitment to sustainability.

Carlo will rate the sustainability of investment funds, closed funds and structured products in German-speaking countries. Providers will pay a fee to get evaluated.“The way ratings have been done up to now is neither sustainable nor transparent,” said Jörg Sommer, CEO of Deutsche Umweltsstiftung.

“Investors, policy makers and society need, however, clear criteria to determine how sustainable financial products and companies really are.”

Sommer also told Responsible Investor that he expected the circle of Carlo backers to widen. “We’re in talks with other European countries like Luxembourg that are curious about the initiative,” he said. According to the Liechtenstein Investment Fund Association (LAFV), the principality is home to 735 funds worth a combined CHF36.7bn (€30.5bn).

The launch comes as Luxembourg and Ireland are vying to become the sustainable fund domicile of choice in Europe.

The Grand Duchy already has something similar to Carlo in the Luxembourg Fund Labelling Agency (LuxFLAG), which labels microfinance and environmental funds.

Link (German)