LGX Corner - February

Welcome to the February edition of the LGX roundup!

This month, we bring you the brand new section for Climate-Aligned Issuers on LGX, updates from the LGX Academy, fresh market news, exciting new bond issuances and much more.

We are happy to announce that we have joined forces with Climate Bonds Initiative to expand the scope of LGX and include next to the existing product section, a new issuer section, Climate Bonds-LGX Climate-Aligned Issuers, currently dedicated to Climate-Aligned Issuers.

Climate-Aligned Issuers are private or public companies that derive at least 75% (strongly-aligned issuers) or at least 95% (fully-aligned issuers) of their revenues from low-carbon activities. Given their positive environmental impact, both of these types of issuers provide an additional range and diversity in the available climate-aligned investment universe.

This development, made possible through our partnership with Climate Bonds Initiative, who defined the methodology and is responsible for the research, analysis and screening of the companies included, helps investors identify untapped sustainable investment opportunities while at the same time providing Climate-Aligned Issuers with increased visibility.

As the LGX Academy winter course cycle is successfully coming to an end with 18 professionals from Luxembourg, Germany and the Netherlands, our expert lecturers have already started a series of tailor-made courses. This time, they will deliver classes to employees from the Luxembourg branch of a Brazilian bank that intends to build up its expertise on sustainable finance.

Starting this month, 15 employees will attend the LGX Academy courses to develop their sustainable finance knowledge and learn through practical business examples.

In the 11th episode of Shaping Finance, the popular podcast series made by Luxembourg For Finance, LuxSE Deputy CEO and LGX Founder Julie Becker shares her views on crucial topics such as the essential role of ESG data in sustainable finance, the future of the Capital Markets Union and the impacts of digitalisation on the organisation of an exchange.

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

The LGX DataHub allows you to define when and how you want to be informed about new developments in sustainability data, such as the publication of new post-issuance reports. Thanks to the watchlist feature, you will always be among the first to know the latest data developments in the industry.

French energy company Total took a big step in accelerating its transition to a more sustainable model as CEO Patrick Pouyanné announced that all new bonds issued by the company would be Sustainability-Linked Bonds. A rebranding to TotalEnergies will also be proposed to the company's shareholders later this year.

This strategic decision illustrates Total's ambition to work towards a carbon-neutral model, provide cleaner and more affordable energy and increase its use of renewables.

At a conference on climate finance, Governor of the Banque de France and European Central Bank (ECB) Executive Board Member François Villeroy de Galhau called for the ECB to buy corporate bonds aligned with the Paris Agreement in order to limit its climate risk exposure.

Mr Villeroy de Galhau proposed to start decarbonising the ECB's balance sheet "with a pragmatic, progressive and targeted approach to all corporate assets" either through purchasing or as collateral, and argued in favour of a harmonised regulatory framework.

Our Sustainability Research Manager, Paul Chahine, was part of the expert group that translated the International Capital Market Association's Green Bond Principles (GBPs) and Social Bond Principles (SBPs) into Arabic. Translating such key resources is essential to ensure a more inclusive industry for Arabic-speaking finance professionals. As an exchange, we believe that diversity is a strength and we are proud to have a diverse team of experts continuously working to raise awareness of sustainable finance across the world.

The paper manufacturer Klabin Austria GmbH issued a new USD 500 m Sustainability-Linked Bond. The notes related to this issuance are susceptible to coupon readjustments if the company fails to achieve at least one of its defined sustainability goals:

Two new EUR 1 bn Green Hybrid Bonds from Iberdrola were displayed on LGX, marking the largest green hybrid bond issuance in the company's history. Proceeds will be used to finance the offshore wind farms of Saint Brieuc in France and BalticEagle in Germany as part of the group's EUR 75 billion investment plan for 2020-2025.

CABEI made its debut on LGX with an inaugural USD 500 m Social Bond, thus becoming the first financial institution in the Central American region to issue a global Social Bond. In accordance with CABEI’s Social Bond Framework, the issuance aims to deepen the bank’s commitment to fight social disparity and contribute to the socio-economic development of the region.

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