LGX Corner - November

Welcome to the November edition of the LGX newsletter!

This month, we discuss the increased scope of the Luxembourg Green Exchange (LGX), sustainable finance education in France, a new green bond impact index and much more.

The rise of Sustainability-Linked Bonds (SLBs) this year has brought more diversity in the types of securities and issuers available in the sustainable debt sphere. In response to this new market development, and to encourage issuers to work towards ambitious sustainability objectives, we decided to increase the scope of LGX to include SLBs.

SLBs are performance-based bond instruments where the issuer commits to future improvements in sustainability outcomes within a predefined timeline. The novelty of this instrument is that the financial or structural characteristics of the bond can vary depending on whether the issuer achieves the predefined sustainability objectives. SLBs represent a source of financing for sovereigns and companies in all sectors that set clear and ambitious science-based targets to become more sustainable.  

Earlier this month, we announced that we have partnered with the international strategy consulting and communication agency NextSee to give a series of sustainable finance classes to French market players.

As part of NextSee's courses dedicated to sustainable finance, the LGX team will give lectures to different market players in both private and public institutions, as well as local communities, to raise awareness, boost sustainable finance education and help different stakeholders accelerate their green transition.

As a further step in our mission to facilitate sustainable investments, we recently established a new green bond impact index in collaboration with German index provider Solactive, the Solactive LGX Green Bond Impact Index.

The index, owned and managed by Solactive, is composed of a selection of green bonds displayed on LGX, which fund projects with a positive environmental or climate impact. In addition, the green bonds are all part of the LuxXPrime selection to ensure a sufficient level of liquidity.

Can Green Bonds catalyse investments in biodiversity and sustainable land-use projects?

Find out the answers and more in a joint article about the importance of Green Bonds in financing sustainable land-use projects and fostering biodiversity, written by Paul Chahine, LuxSE Sustainability Research Manager & LGX Academy lecturer, and Ludwig Liagre, Sustainable Finance Advisor at Global Landscape Forum.

In the latest edition of Agefi's monthly publication, our Deputy CEO and Founder of LGX, Julie Becker, shares her thoughts on the key role of data in the rise of sustainable investments, and explains why reliable, transparent and meaningful data is essential for asset managers and investors when building sustainable investment strategies and reporting on these investments.

In an interview for the Council of Europe Development Bank's quarterly magazine, Julie Becker discusses the role of sustainable finance in the recovery from the COVID-19 crisis.

"The pandemic is an opportunity for us to work together across borders and sectors to build a more sustainable and inclusive economy, and a more resilient society," she comments before calling for action, "it is our duty to act, and to start now”.

Have you ever heard about the Green Bond Technical Assistance Program (GB – TAP)? Designed and delivered by the International Finance Corporation and the International Capital Market Association, this program aims to help bankers accelerate the growth of green bonds in emerging markets. GB – TAP provides technical support on green bond issuances by sharing knowledge and best practices in order to help finance professionals in emerging markets enter and develop the green bond market.

As part of a recent edition of GB – TAP, a 4-week course that covered green, social and sustainability bonds, Julie Becker gave a keynote speech about the importance of fostering sustainable finance in the current economic climate.

LafargeHolcim led the way by issuing the first Sustainability-Linked Bond in the building materials industry. With this EUR 850m bond, due in 2031, the company commits to substantial CO2 reduction targets by 2030 and demonstrates its commitment to becoming a net-zero company.

The European Union issued two new bonds for a total of EUR 14bn under the SURE programme, following its historic inaugural social bond issuance of EUR 17bn last month. Proceeds will support Member States in their efforts to protect employment and workers heavily impacted by the pandemic.

The KfW, a regular issuer on LGX, issued a new EUR 2bn tap to complete one of its listed green bonds, bringing the bond line to EUR 6bn. The tap's proceeds will finance renewable energy projects and green buildings among others.

At the end of November, the World Bank issued a dual-tranche Sustainable Development Bond, totalling USD 8bn, and a GBP 1bn Sustainable Development Bond. The securities' proceeds will help Member Countries finance sustainable development projects related to climate change, gender and infrastructure.

The participants of the LGX Academy's first virtual course cycle received their training certificates earlier this month.

The certificates assert that each participant completed at least one of the three modules of the course, with each module organised as 2-hour sessions over three days. During this course, participants had the opportunity to discover the foundations of sustainable finance, products and standards, applicable regulations and current market practices, among other essential topics. Congratulations to all LGX Academy course participants!

Each month, we introduce you to one of the features of the LGX DataHub to help you kick-start your sustainable investment strategy.

Our series of analytics tools allow you to find the right graphs, explore various widgets, and filter the data about the securities that matter to you. You will be able to build a better investment strategy in no time thanks to leading data-driven sustainability insights.

The demand for structured and comparable sustainability data has only increased over the past few years and this data challenge forms the backdrop of the LGX DataHub.

But how did this project come about, what were the challenges along the way and what makes it unique? Find out more in an exclusive Behind the Scenes interview with the LGX DataHub team.

If you are interested in joining NextSee's sustainable finance classes, reach out to NextSee for more information on the next available course dates for public and private companies or for local and regional communities.

Sign up to our newsletter and stay up-to-date on everything LGX and the latest developments in sustainable finance.