Financial centre

Sustainable finance

Showing the way to a greener economy

The Grand Duchy has been actively engaged in the microfinance industry since the early 1990s with the establishment of the first Luxembourg microfinance institutions.

Today, Luxembourg is the global leader in inclusive finance and has a 61% market share of global assets under management in Microfinance Investment Vehicles (MIVs).

The financial centre acts as a leading international platform for sustainable finance, supporting a range of activities from responsible investment funds and blended finance to green bond listings and ESG fund labelling.

Luxembourg: A force for good

 

Luxembourg is constantly expanding its toolbox of products and services designed to promote investment into green and sustainable projects and to help bring sustainable finance into mainstream.

The  Grand Duchy of Luxembourg is fully committed to the goal of transforming itself and assisting other markets in their transition to a sustainable global economy. To this end, Luxembourg has established a coherent climate finance startegy with the dual objectives of contributing in a meaningful way to the international fight against climate change and cementing Luxembourg’s role as an international centre for climate finance.

Some of the initiatives include:

  • The Luxembourg Sustainable Finance roadmap: drafted in partnership with UNEP, it establishes a comprehensive sustainable finance strategy, notably leveraging Luxembourg’s inherent strengths as an international financial centre, to contribute to the Agenda 2020 and the objectives of the Paris Agreement.
  • The EIB Climate Finance Platform
    This joint initiative with the European Investment Bank (EIB) is designed to mobilise investment for climate related projects by combining a stop-loss guarantee with technical assistance.
  • The International Climate Finance Accelerator
    This public-private partnership provides financial and operational support to fund managers launching innovative climate action funds.
  • The Amundi Planet Emerging Green One Fund
    This joint venture with the International Finance Corporation invests in green bonds emitted by banks in developing countries.
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Leader in Responsible and Impact funds

Luxembourg has a strong track record in socially responsible and impact investments, providing the perfect environment for climate finance funds.

Thanks to a tried and tested toolbox of investment vehicles, widely considered the most adaptable in the European marketplace, Luxembourg layered funds have proven particularly effective in projects requiring blended financing from both public and private investors.

The Luxembourg Green Exchange: The world’s first and only green exchange

In 2016, the Luxembourg Stock Exchange launched the Luxembourg Green Exchange (LGX), the first global platform dedicated to green, socially responsible and sustainable securities.

The LGX, with its enhanced transparency and reporting standards, channels investment into sustainable projects.

Through stringent eligibility criteria the LGX also contributes significantly to the definition of a global sustainable investment taxonomy.

 

1st

The Luxembourg Green Exchange has the largest market share of listed green bonds worldwide.

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By setting strict standards for green securities, LGX aims to create an environment that will allow the market to prosper in a secure and transparent way.”


Robert Scharfe, CEO, Luxembourg Stock Exchange

Fund labelling: LuxFLAG

Fund promoters can also use the LuxFLAG investment labelling system to reassure investors that a product invests in the given sector in a sustainable and transparent manner.

LuxFLAG, the government’s dedicated fund labeling agency, confers the labels or specific investment fund strategies such as microfinance, ESG, environment and climate finance.

Philanthropy: putting wealth to work

Wealth can be an incredible leverage to help others. Luxembourg provides solutions to maximise the impact of giving.

The Fondation de Luxembourg is the country’s specialist philanthropy service provider.

The Fondation de Luxembourg is an important asset for the Luxembourg private banking community. By means of an umbrella foundation structure, the Fondation de Luxembourg assists donors in selecting, structuring and managing their philanthropic investment projects. The organisation now covers 80 foundations that engage in projects around the world.

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