Laetitia Hamon, the Luxembourg Stock Exchange's head of operations and sustainable finance, reflects on the Luxembourg Green Exchange's journey from listing the world's earliest green bond in 2007 to building a global ecosystem spanning data, education, and transition finance.

Environmental Finance: Looking back over the past decade, how has the role of the Luxembourg Green Exchange (LGX) in sustainable finance evolved?

Laetitia Hamon: To understand the past decade, it's important to go back further, before LGX was created. We were already pioneers in sustainable finance, listing some of the first green bonds in 2007 and 2008. That's when we recognised the role we could play in shaping this market.

As a leading exchange for fixed income, we saw green bonds as more than a niche product – they signalled a structural shift. In 2016, we launched LGX, our dedicated platform for sustainable bonds, around the time of the UN Sustainable Development Goals and the Paris Agreement. The aim was to bring transparency and help channel capital towards environmental and social projects.

Today, the LGX platform hosts more than 2,300 sustainable bonds across approximately 60 countries and over 40 currencies.

EF: How did you expand beyond being a platform to address broader market needs?

LH: We quickly realised the market required education, data, and practical support to develop. Education was the first gap. Many market participants didn't fully understand these instruments or how to issue them, so we launched the LGX Academy to provide training and capacity-building, particularly for new entrants to the market.

The second gap was data. Investors wanted to understand the impact of their investments. In response, we launched the LGX DataHub in 2020, which now covers around 25,000 sustainable bonds with detailed use-of-proceeds and impact data.

The third area is hands-on support. Especially in emerging markets, issuers need guidance on frameworks, documentation, and best practices. That's why we launched the LGX Assistance Services, to facilitate issuers' entry into sustainable finance by offering tailored guidance based on their unique profiles and objectives.

EF: You've recently expanded into issuer-level analysis. What drove that shift?

LH: Initially, we focused on the bonds themselves. But investors increasingly want to understand the issuer behind the bond – whether they are genuinely transitioning and how sustainability fits into their overall strategy.

This led to a more holistic approach. In 2025, we launched a platform called the Transition Finance Gateway, focused on transition finance at the issuer level, aggregating selected external data into a clear, accessible format.

We deliberately avoided replicating traditional ESG ratings. Instead, we focus specifically on transition-related data, helping users understand how companies are progressing. By combining issuer-level insights with bond data, we provide a more complete view of transition financing.

EF: How does LGX support credibility and guardrails for transition finance?

LH: On the bond side, we now identify and display transition bonds and provide information on how much of the proceeds are allocated to transition-related activities. This helps investors assess whether the impact of the transition-related financing is meaningful. Issuers, in turn, benefit from visibility if they meet high standards of transparency.

The data also enables more informed engagement. Investors can have more constructive discussions with companies about their transition strategies.

Even before the emergence of transition finance, transparency has been fundamental to LGX. In 2016, we set high requirements, including mandatory external reviews and commitments to post-issuance reporting – well before this was standard practice.

In the LGX DataHub, we emphasise detailed use-of-proceeds and impact data, and highlight whether information has been externally verified. This transparency is in place to support investor due diligence and strengthen trust and credibility.

EF: How have you approached innovation and diversification across regions and themes over the last decade?

LH: We've expanded beyond green bonds to include social, sustainability, sustainability-linked and most recently transition bonds, as well as thematic areas such as gender-focused bonds, which are gaining traction – particularly in emerging markets. These instruments show how capital markets can address broader social challenges.

Emerging markets have been a major focus. Through training and partnerships, we've supported the development of sustainable finance ecosystems in multiple countries. In many cases, markets that initially had little activity are now issuing sustainable bonds and engaging globally. Sri Lanka is a very good example – there was a great deal of scepticism initially and now we have seen several years of issuance from the country itself and the wider region.

EF: Looking ahead, how do you see the role of LGX evolving over the next decade?

LH: In emerging markets, the focus is shifting from education to market development – supporting local sustainable bond ecosystems and dedicated sustainable finance segments on exchanges.

For hard-to-abate sectors and transition finance, we are developing tools to support investor engagement. This includes providing the data investors need to facilitate meaningful bondholder engagement and foster the transition in a credible manner.

One of the main challenges that remains is the ESG backlash. There's a need to shift the narrative to emphasise not only environmental and social impact, but also long-term financial value.

Another key challenge is retail investor engagement – while institutional investors are advanced in their understanding of the role of sustainable bonds, broader understanding in the retail investor segment remains limited.

Standardisation, policy stability, and comparability across regions also remain critical. Investors need clarity to operate effectively in global markets.

Sustainable finance has always gone through cycles of momentum and scepticism, but it endures. The priority now is ensuring it continues to evolve in a way that is credible, transparent, and aligned with both financial and societal goals.

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