To help you understand this complex ecosystem, we spoke with Guillaume Lasserre, Chief Investment Officer of La Banque Postale Asset Management (LBPAM). A pioneer in this field, LBPAM announced its ambition to obtain the ISR label for its entire fund range back in 2018. Guillaume now shares his expert vision on recent developments and upcoming challenges.
The labelling system adds an additional normative layer to an already robust European regulatory framework. However, their role is quite specific, as they provide additional guarantees to investors, with more objective requirements than existing regulations. In this regard, Guillaume Lasserre emphasises that "the ISR label has established itself thanks to three essential characteristics: its status as a public label, its consistent progression in terms of requirements, and the presence of a trusted third party with precise specifications, unlike the SFDR self-declaration model."
Presentation of European sustainable finance labels
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2024 and 2025 have been marked by the revision of several label frameworks: Greenfin (2025), FNG-Siegel (2024), UZ 49 (2024), and Finansol (2025). This dynamic demonstrates a collective desire to strengthen requirements and align with new regulatory provisions.
In particular, the overhaul of the ISR Label caused quite a stir in the financial sector in 2024. This revision introduces several significant innovations: a more demanding selectivity rate, strengthened exclusions, as well as the obligation to analyse issuers' transition plans (obligation of means from 2025 and obligation of results from 2026) and to engage issuers based on their ESG performance.
This upward revision of requirements has led to a redefinition of the ISR-labelled fund landscape, with a reduction from 1,389 to 945 funds in 2025. Guillaume Lasserre confides, "We're quite proud to have maintained 101 ISR-labelled funds." He explains: "The difficulty lies particularly in evaluating the long-term transformation of portfolios. Whether in terms of engagement or analysis of transition plans, it's very challenging to develop a common methodology for all invested positions, which are spread across different geographical areas, each with its own cultural and regulatory specificities."
The French market is distinguished by two labels with specific and complementary objectives:
These two labels, while integrating ESG criteria, maintain their specificities to address distinct market needs.
The sustainable finance label market is organised around two main approaches:
Guillaume Lasserre explains the advantages of a "tiered" or "drawer" label system: "The objective is to create a 'Russian doll effect' with a basic foundation and additional more demanding social/climate dimensions, allowing us to address more specific client needs." LBPAM's response to the consultation on the ISR Label redesign therefore went in this direction. The Label Committee ultimately chose to maintain a generalist label, but with a greater focus on environmental and energy transition issues. This decision resulted in increasing the requirements of the ISR label across all dimensions, at the risk of creating a label that only meets the needs of very demanding clients.
Structure and Main Requirements of European Sustainable Finance Labels
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Despite their structural differences, most labels impose a foundation of mandatory exclusions that reflect the ethical and strategic priorities of each market. These exclusions are distinguished by:
"No label imposes exactly the same exclusions" emphasises Guillaume Lasserre. "Take the example of conventional weapons: their total exclusion by the Belgian label contrasts with the more targeted approach of French labels, focused on controversial weapons. These differences reflect distinct national strategic priorities and raise the question of European harmonisation."
Example of mandatory exclusions imposed by European sustainable finance labels
Labels generally require regular publication of sustainability indicators:
Reporting regulatory and/or general metrics have the advantage of allowing greater comparability of labelled funds. However, for thematic funds, the challenge is twofold: identifying relevant indicators and obtaining reliable data. Guillaume Lasserre illustrates this issue with LBPAM's biodiversity funds: "We have developed a BIRD indicator that combines impact measurements and evaluation of company practices. This hybrid approach allows for a more comprehensive analysis of biodiversity issues."
The multiplicity of labels represents a major harmonisation challenge. While some demonstrate pragmatism, such as Finansol, which recognises funds already labelled Greenfin or ISR, others operate in silos. This situation creates significant operational constraints for asset managers.
Guillaume Lasserre testifies: "Articulating the different requirements is complicated to implement. French labels aren't talking to each other: we had to remove a Greenfin fund from an ISR fund of funds - the Greenfin label is very demanding, but the ISR label doesn't take its existence into account in its framework."
The sustainable finance label sector continues its transformation in a changing European political and regulatory landscape.
The alignment of the Greenfin label with the requirements of the Paris-Aligned Benchmark (PAB), in line with ESMA's Guidelines on fund names, could constitute a first step towards European harmonisation. However, the path remains fraught with obstacles.
In particular, the proposals of the Omnibus I Directive are likely to destabilise the label ecosystem. Specifically, the potential reduction in CSRD scope could have a significant impact on the quality of ESG data and on the publication of transition plans by companies.
The constant evolution of frameworks testifies to the financial sector's growing ambition in terms of sustainability.
To stay informed about upcoming developments, please consult our 2025 regulatory calendar.
