Luxembourg’s sustainable finance expertise
Luxembourg has been at the leading edge of these European developments, thanks to collaboration in the relevant EU working groups and in public consultation exercises involving the banking, investment fund and insurance industry associations.
But the Grand-Duchy has also pioneered sustainable finance practices on its own account, thanks largely to close cooperation between the public, private, and civil society sectors. It has also built an ecosystem, which is uniquely adapted to raising international capital for responsible investments. Furthermore, the country is home to the European Investment Bank (EIB), the world’s largest green lender and an expert in public-private investment projects.
Luxembourg ranks among the world’s top green financial centres in the latest Global Green Finance Index (GGFI) published in 2020, which measures how financial centres contribute to the creation of a more sustainable global economy. The Grand Duchy ranks second in terms of Green Finance adoption and sixth in terms of the quality of its Green Finance services and products.
In sustainable finance, Luxembourg is:
- The Green Bond capital of the world
Over 50% of all worldwide sustainable bonds (green, social and sustainability bonds) are listed on the Luxembourg Green Exchange (LGX). The world’s first platform dedicated exclusively to sustainable securities and a trading point for issuers and investors.
- The leading European sustainable investment funds domicile
Luxembourg is the European leader in responsible investment fund assets, accounting for 34% of funds and 35% of all assets under management2 in European responsible investment funds.
- Home to LuxFLAG:
A commitment to quality Luxembourg is home to LuxFLAG, the pioneering finance-labelling agency, providing clarity and confidence to investors in sustainable. LuxFLAG labels around 200 financial products from asset managers in over 16 countries.
- A leader in microfinance vehicles
Luxembourg has a history of commitment to the microfinance sector since the early 2000s, and is home to over 46% of all assets in microfinance vehicles making it a world leader in the sector.
- Enabling philanthropy
The Fondation de Luxembourg, a public-private partnership provides a third-party facility for the establishment of private philanthropic foundations, providing advice and guidance to donors. Projects fall under one of five themes: health, social cohesion, diversity, universal education and climate change.
- Helping others through financial knowledge transfer
Luxembourg hosts the ATTF-House of Training, which co-finances training programmes around the world, strengthening financial structures, capacity building, and supporting sustainable development in 40 markets.
Luxembourg’s sustainable finance strategy
Luxembourg has set up a coherent sustainable finance strategy to help globally leverage public and private sector investment. Each sub-industry of the financial sector is becoming increasingly active in sustainability: banks, asset managers, insurers, capital markets and FinTechs.
Key initiatives and achievements in sustainable finance in Luxembourg
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The Luxembourg Green Exchange
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Luxembourg-EIB Climate Finance Platform
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Climate Finance and Green Bond labels
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UN Financial Centres for Sustainability (FC4S)
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IFC / Amundi Planet Emerging Green One
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The International Climate Finance Accelerator
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The Luxembourg Sustainable Finance Roadmap
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First European country to launch a sustainability bond framework
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The world’s first legal framework for green covered bonds
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Inclusive finance Network
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Financial inclusion through FinTech
Defining characteristics of the Luxembourg financial centre
The success of Luxembourg as an international financial centre is founded on:
- decades of experience in dealing with an international client base and serving clients on a cross-border basis;
- economic, political, social and financial stability;
- a legal, regulatory and tax framework that caters to the specific requirements of all types of international finance;
- a state-of-the-art IT infrastructure focused on providing the financial centre with a service which is fast, secure and reliable;
- a culture of investor protection and rigorous anti money Laundering policies;
- a strong working relationship between the public and private sectors