Environmental Finance's Sustainable Debt Awards 2024

Global solutions for global challenges

Laetitia Hamon, Luxembourg Stock Exchange's (LuxSE) head of sustainable finance, tells Environmental Finance how the exchange's sustainable finance strategy and related projects are having a global impact as its initiatives aimed at market development and engagement expand.

Environmental Finance: How has LuxSE continued in its mission to advance gender finance over the past year?

We implemented the gender-focused bond flag on the Luxembourg Green Exchange platform, or LGX in 2022, and by the end of 2023, almost 70 sustainable bonds listed on the Luxembourg Stock Exchange and displayed on LGX carried this flag on their security card. In 2023, we also brought new initiatives to the market aimed at fostering awareness of the importance of gender finance and gender-lens investing, and we worked to strengthen practical knowledge of how to identify and invest in projects that contribute to advancing gender equality and women's empowerment across the world.

Laetitia HamonIn May 2023, we published a market study entitled 'Linking gender and finance: An overview of the gender-focused bond market', which analysed data on 169 outstanding green, social, sustainability and sustainability-linked (GSSS) bonds listed worldwide as of February 2023, and identified via the LGX DataHub, which allocate all or a portion of their proceeds to financing projects or set clear objectives that advance gender equality.

We also contributed to UN Women's case study series: 'Innovative financing for gender equality via bonds', which aims to encourage future issuers to opt for innovative financing instruments to reduce the gender gap.

Another important development was the launch of a new two-hour LGX Academy module on 'How capital markets contribute to the growth of gender finance', which gives participants a better understanding of the scope and state of the gender-focused bond market and how they can contribute to improving gender equality through their financial strategies and investment decisions.

EF: How does the exchange continue to foster sustainable finance developments in emerging markets? What results are you seeing in terms of engagement and issuance in different regions?

LH: Global challenges require global solutions, which means mobilising funding for sustainable developments and channelling these capital flows towards the regions where they are needed the most. It is essential that sustainable finance becomes truly global, and to achieve this, we need to cooperate across borders.

Throughout the course of 2023, we joined forces with the likes of Chongwa (Macao) Financial Asset Exchange Co (MOX), China Everbright Bank, the Abu Dhabi Securities Exchange, India-based Global Institute for Circular Economy and Sustainable Development Goals (GICE&SDGs) and Bolsa de Valores de Cabo Verde (BVC) to advance the sustainable finance agenda in new regions.

This resulted in new sustainable bonds from emerging markets being brought to international capital markets via LuxSE such as the first Cabo Verdean green bond focused on the blue economy, issued by the International Investment Bank, as well as the first gender bond from Sub-Saharan Africa issued by NMB Bank in Tanzania, to name but a few examples.

Our LGX Academy lecturers were also active in emerging markets in 2023, providing training in Sri Lanka, the Ivory Coast and China. We also co-organised a three-day Green Bond Technical Assistance Programme (GB TAP) in Luxembourg with the International Finance Corporation in November 2023, which gathered 29 senior bankers from 17 different emerging economies. Moreover, we continued our work as International Certifying Institution for Governart and the Santiago Stock Exchange's ESG Analysis Certification issuing 40+ certificates to participants from Chile, Mexico and Guatemala in 2023.

Through this work, we aim to give market participants in emerging economies the tools that they need to enter the sustainable finance market, and this is one way in which we contribute to reorient sustainable capital flows towards these regions, where the sustainable development funding gap is considerable.

EF: How is your aim to provide structured data to accelerate sustainable finance progressing?

LH: Access to reliable data is essential to accelerating the progress and wider adoption of sustainable finance.

By housing sustainable bond data on close to the entire universe of listed GSSS bonds – more than 14,000 bonds from 3,000 issuers to be precise - the LGX DataHub allows investors to understand and compare the green and social impact of different securities, make informed investment decisions that align with their sustainability goals and provides them with the data they need to comply with the new sustainability-related reporting requirements.

In June 2023, the LGX DataHub was even selected by the International Capital Market Association (ICMA) to power its public platform dedicated to sustainable bond data and was also used by ICMA for its market overview reports – a testament to the quality and depth of the data housed in the LGX DataHub.

Other leading institutions published market studies based on figures from the LGX DataHub, including the Organisation for Economic Co-operation and Development, which produced a report on the GSSS bond market in developing countries. Moreover, in September, we decided to make the LGX DataHub dashboard openly available and provide aggregated data on the listed sustainable debt global landscape, as part of our efforts to strengthen sustainable finance knowledge in the broader ecosystem.

EF: Are there any other ways in which LuxSE is driving new initiatives on and beyond the LGX platform?

LH: Beyond what we achieved in 2023, with a new year now well and truly underway, we continue to explore new ways in which we can contribute to accelerating sustainable finance. Fostering knowledge and awareness of the role that finance and capital markets play in the green transition, for instance, remains essential in this respect.

We recently revamped the LGX Academy and will now be holding monthly, two-hour sessions focusing on a new topic each month. From transition finance to emerging markets and many other highly relevant topics in between, our goal is to provide participants with a more complete view of the rapidly evolving landscape in a way that is easy to digest and with real-world examples.

More broadly, this year, we are also exploring different initiatives in the field of transition finance.

For more information, see: https://www.luxse.com/discover-lgx