This month marks the fifth anniversary of the Luxembourg Green Exchange (LGX), which was created in 2016 as a response to the Paris Climate Agreement and the United Nations Sustainable Development Goals.
Since the Luxembourg Stock Exchange (LuxSE) established its platform for sustainable securities, LGX has gone from strength to strength and now counts more than 1,000 sustainable debt securities from 200 issuers in over 40 countries. As the global reference venue for green, social, sustainability and sustainability-linked bonds, LuxSE and its leading green platform serve issuers from a range of industries across the private and public sectors, having raised close to EUR 550 billion for specific green and social projects and sustainable development across the world.
“When we established LGX five years ago, we knew we were taking a risk by setting a high bar for green bond issuers. Now, looking back at everything that we have achieved and all the issuers that have joined LGX so far, we can safely conclude that we made the right call. After five years, our mission to transform finance is as strong and necessary as ever, and we will continue our work to accelerate the transition to a low-carbon and more inclusive economy,” said Julie Becker, CEO of LuxSE and Founder of LGX.
Increasing the scope
LGX started as a platform dedicated to green bonds, but only a year later, the scope was increased to include social and sustainability bonds. In 2018, LGX opened a section for SRI funds and two years later, it added sustainability-linked bonds. The platform has kept evolving to support new market developments, and earlier this year, a new section dedicated to climate-aligned issuers was added in partnership with Climate Bonds Initiative, thereby highlighting other investment opportunities in the broader sustainable investment universe.
In 2020, LuxSE went beyond its core activities as a listing venue and entered the realm of education and sustainability data. Through the LGX Academy, LuxSE’s experts offer courses on sustainable finance to financial professionals and students in and beyond Luxembourg. The exchange has also built the LGX DataHub, a centralised database of structured sustainability data on more than 3,200 sustainable bonds — close to the entire universe of listed green, social and sustainability bonds worldwide — which helps investors and asset managers build sustainable investment portfolios and report on these investments. In collaboration with German index provider Solactive AG, LuxSE also established the Solactive LGX Green Bond Impact Index late last year.
Award-winning initiative
The development of LGX reflects the strong growth in sustainable finance more broadly over the past five years. With its innovative platform, LuxSE has been widely recognised for its contribution to facilitating sustainable investment and reorienting capital flows towards investment projects with positive environmental and social outcomes.
As an example, LuxSE won the UN Global Climate Action Award 2020 for its role in accelerating financing for climate-friendly investments, and has been recognised as the Exchange of the Year at the Environmental Finance Bond Awards for the past five years.
Celebrating the growth of sustainable finance
The fifth anniversary of LGX was celebrated with an event dedicated to sustainable finance, which welcomed Luxembourg Minister of Finance Pierre Gramegna as a keynote speaker, along with explorer and Founder of the Solar Impulse Foundation Bertrand Piccard, Head of PACTA at 2° Investing Initiative Maarten Vleeschhouwer, Academic Scholar at the University of Oxford Arumna Oteh and President of S&P Global Sustainable1 Richard Mattison. The speakers highlighted some of the main drivers of sustainable finance and their perspectives on some of the barriers that still remain. Julie Becker and Laetitia Hamon, respectively CEO and Head of Sustainable Finance at LuxSE, outlined the main milestones from the past five years and offered a sneak peek into where LGX is headed next, which includes an assessment of the sustainability strategy of all the issuers on LuxSE, beyond LGX.
