News - 12.06.2018

Luxembourg and Shanghai exchanges connect issuers and international investors through new Green Bond Channel

  • Sustainable Finance

The Luxembourg Stock Exchange (LuxSE) has launched a Green Bond Channel in partnership with the Shanghai Stock Exchange (SSE).

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The cooperation between the two exchanges focuses on providing relevant information in English about Chinese green bonds to offshore investors.

China boasts one of the world’s largest bond markets, valued at USD 9 trillion, with a production of green and sustainable bonds in excess of RMB 250 billion (approx. EUR 33 billion).  However, the market may appear off-limits to the international investor community due to the difficulties of accessing the right level of information on the traded bonds.

“The Green Bond Channel is an information channel which aims to bridge this information gap. Our key focus is on helping to enhance investment channels between China and Europe. Stock exchanges can support the mobilisation of investor demand for investment. By receiving enhanced visibility, issuers are exposed to a far wider segment of potential investors and a deeper pool of investment capital,” commented Robert Scharfe, CEO of LuxSE, at the official launch of the cooperation announced at the Public Meeting of the World Federation of Exchanges and the SSE on June 8.

The agreement will improve efficiency in connecting issuers and international investors. The Chinese-listed green bonds can be traded via existing execution channels.

In March 2018, LuxSE extended the same display service to the Chinese Interbank Market and welcomed the first bond from a Chinese policy bank, the Agriculture Development Bank of China (ADBC).

Each of these initiatives are testimony to Luxembourg’s strong track record of innovation in sustainable finance. The country currently ranks among the top green financial centres in the Global Green Finance Index (GGFI).

Two weeks ago, policymakers and industry leaders from the European sustainable finance community gathered in Luxembourg for the 1st edition of the Sustainable Finance Forum to discuss the key role of the financial industry in the transition towards a sustainable, low-carbon economy.  The Luxembourg government also signed an agreement with the IFC, a member of the World Bank Group, that will support the creation of new markets for climate finance in emerging economies—by developing green-bond policies, training bankers and executives, and helping countries adopt the Green Bond Principles and other best practices.