Exchange of the year - Luxembourg Stock Exchange

Channels: Green Bonds

Companies: Industrial and Commercial Bank of China, Chinese bank ICBC, Brazilian National Development Bank, African Development Bank

People: Julie Becker

Luxembourg Stock Exchange cemented its position as a leader in sustainable finance in 2017.

The bourse, which launched its ground-breaking Luxembourg Green Exchange (LGX) platform in 2016, can claim to be home to more than half of all listed labelled green bonds globally. In 2017 it opened two extra windows to list social and sustainable bonds.

By the end of 2017, LGX boasted 132 green bonds, 13 social bonds and six sustainable bonds from 41 issuers across the globe. Examples of bonds listed in 2017 include offerings from the Province of Ontario, Chinese bank ICBC, Brazilian National Development Bank (BNDES), and a social bond from the African Development Bank.

The bonds listed on LGX contribute to 15 of the 17 UN Sustainable Development Goals.

The stock exchange has embraced the opportunity to help scale up green finance, and add to its transparency and rigour. For example, bonds listed on the LGX are required to adopt industry best practices such as having some form of external assessment, and in 2017 they were required to report on their impacts within a designated timeframe.

Julie Becker, a member of the executive committee, was a member of the EU's High-Level Expert Group on Sustainable Finance, which informed a subsequent action plan on sustainable finance launched by the European Commission.

Luxembourg was the chair of the UN Sustainable Stock Exchanges Initiative, resulting in the publication of a 50-page voluntary action plan for stock exchanges: How stock exchanges can grow green finance.

Since last year, companies listed on the regulated market of the exchange incorporated under Luxembourgish law have to disclose their corporate social responsibility policy.

"Exchanges really need to act now, in my opinion," Becker told Environmental Finance. "We are about to evolve into a hub for sustainable investment products. We believe that our innovative mindset in developing new tools in the sustainability space will channel more funds to the green bond market."

An example of how Luxembourg is advancing the discussion around green finance can be seen in its thought leadership piece for Environmental Finance on impact reporting.

One judge described the work of the exchange as "commendable".