The Grand Duchy ranks 2nd in Green Finance penetration and 6th in Green Finance quality in the latest Global Green Finance Index (GGFI). Based on criteria using only the instrumental factors that have a direct relationship to sustainability, Luxembourg ranks 2nd in Green Finance quality. Western Europe financial centres perform well in the Index demonstrating the significant leadership played by the EU such as the recent ambitious strategy set out by the EU High-Level Expert Group on Sustainable Finance (HLEG) and the recently published action plan by the EU Commission to place sustainability at the heart of Europe’s financial system.
The index appears to demonstrate that financial centres that are specialised in green finance, such as Paris, Luxembourg and China, have achieved a high ranking.
Luxembourg has a long track record of innovation in sustainable finance.
With an initial focus on microfinance, and the creation of a dedicated labelling agency (LuxFLAG), Luxembourg is today Europe’s leading domicile for responsible investment funds as well as the leading centre for listing green securities, having listed the world’s first green bond in 2007 on the Luxembourg Stock Exchange with the European Investment Bank (EIB). As of today, LuxFLAG labels more than 50% of global microfinance assets in investment vehicles.
Launched in 2016, the Luxembourg Green Exchange (LGX) is mentioned by the GGFI as a key initiative in green finance innovation and is recognised for the quality and depth of its green finance offerings. The world’s first platform exclusively dedicated to green securities lists today half the world’s green bonds.
In addition, Luxembourg is today home to one-third of European responsible investment funds, 2 in 3 European impact funds and accounts for more than 60% of assets in microfinance funds worldwide.
Additional initiatives for a greener future include the Luxembourg-EIB Climate Finance Platform, a joint platform launched by the Luxembourg government with the aim to mobilise investments for projects with a strong impact in the fight against climate change, a partnership with the IFC for the Green Cornerstone Fund established in Luxembourg, the launch of dedicated climate finance and green bond labels and an international climate finance accelerator to assist climate asset managers in setting up their funds and raise finance for innovative climate projects.
The first Sustainable Finance Forum, Luxembourg will be held in Luxembourg on 30 May 2018, and bring together the European sustainable finance community, from practitioners to policymakers.