LGX Corner - April

Welcome to the April edition of the LGX roundup!

This month, we bring you our Sustainability Report 2020, fresh news from the sustainable finance market and much more.

In 2019, we developed our CSR strategy with a series of specific goals centred around 4 CSR pillars, namely Think People, Think Business, Think Community and Think Planet, and we released our first Sustainability Report.

To keep track of the progress we have made towards our sustainability objectives, we are happy to announce that our Sustainability Report 2020 is now available on our website.

This second report explores all the activities and initiatives undertaken by LuxSE in 2020, which contributed to positive social or environmental outcomes. Sustainability is at the core of our mission and what guides our operations, and every year we set more ambitious goals for the impact we would like to make on our different stakeholders.

On 21 April, Julie Becker, the founder of LGX, officially became the new CEO of the Luxembourg Stock Exchange. After her nomination was announced in December 2020, Ms Becker has spent the last few months working side by side with our former CEO Robert Scharfe to ensure a smooth transition.

"The global pandemic accelerated the focus on sustainability. We will continue our mission to support the global goals and the ongoing transition efforts by facilitating sustainable investment and contributing to the growth of sustainable finance,” she announced on her first day at the helm of LuxSE.

Last month, 33 professionals from Luxembourg and abroad received their LGX Academy certification. Following this course cycle, our expert lecturers re-organised the three interactive courses available in order to better reflect the current state of the market.

If you're interested in gaining valuable knowledge in one or more of the following topics, make sure to visit the LGX Academy website:

Through a new partnership with the United Nations Development Programme (UNDP), the Cape Verde Stock Exchange recently committed to creating the world’s first sustainable finance platform dedicated to the blue economy. To mark the start of this ambitious project, the two parties organised a workshop within the scope of the UN's Integrated National Financing Framework.

On this occasion, the LGX Academy lecturers delivered a tailored-made training on innovative and sustainable financial instruments, such as blue bonds and impact investments, to various market players from Cape Verde.

What does the future hold for sustainable finance?

You can now access the replay of the very first virtual edition of the Stock Exchange Day on our YouTube channel!

In her keynote speech about sustainable finance, Deputy CEO of Climate Bonds Initiative Justine Leigh-Bell shared insights into the evolution of sustainable finance in the past few years, as well as the trends and drivers that will shape its future development, highlighting the need for more clarity around transition finance.

Earlier this week, we welcomed Arkom Termpittayapaisith, the Kingdom of Thailand's Minister of Finance, and Pierre Gramegna, Luxembourg Minister of Finance, for a virtual Ring the Bell ceremony to celebrate the listing of Thailand’s pioneering sustainability bond. The bond was issued in August 2020, becoming one of the world’s first sovereign sustainability bonds, shortly followed by Luxembourg’s sustainability bond the following month.

The THB 50 bn sustainability bond (approximately EUR 1.3 bn) is now displayed on LGX, which enabled Thailand to become the first Thai issuer on the platform. In addition to being aligned with international standards, the bond falls under the Kingdom of Thailand’s Sustainable Finance Framework, which was published in July 2020.

The first and third tranches, worth a cumulative amount of THB 30 bn, finance clean infrastructure projects, while the second tranche was invested in public health expenditures and SME support.

EU SURE programme: Taking stock after six months

Six months after the introduction of the SURE programme, over EUR 90 bn has already been raised to support 19 Member States, according to the European Commission's first bi-annual report.

The three largest amounts of financial assistance were granted to:

In 2020, the programme is estimated to have supported between 25 and 30 million people, which represents 25% of total employment across the beneficiary Member States. According to the European Commission, 1.5 million to 2.5 million firms in those same countries have been supported through the EU SURE programme.

On 27 April, the Inter-American Development Bank (IDB) launched the Green Bond Transparency Platform (GBTP), which enables issuers, external reviewers, investors and underwriters to publish, verify and retrieve data on impact metrics and use of proceeds for green bonds in the Latin American and Caribbean markets.

Through this platform, the IDB is taking another step towards the harmonisation and standardisation of green bond reporting in the Latin American and Caribbean markets. By providing more transparency and data comparability, the development bank will help to attract new investors to the region and secure the trust of existing investors.

The World Bank releases Sustainable Development Bond Framework

The World Bank published its Sustainable Development Bond Framework, aimed to explain and illustrate how the World Bank bonds support sustainable development, with examples of projects and programmes financed by the proceeds in different member countries.

The framework highlights how these bonds are aligned to the four pillars of ICMA’s Sustainability Bond Guidelines: Use of proceeds, the process for evaluation and selection of eligible operations, management of proceeds and reporting.

This new development demonstrates the World Bank’s commitment to transparency and its willingness to comply with best market practices as it will provide investors with clear and structured information.

On 12 May at 9:30 CET, our Senior Business Development Manager Chiara Caprioli and our Commercial Director Carlo Houblie will speak at a webinar organised by Assosim, the Italian Association of Financial Intermediaries, where they will present the LGX DataHub in both Italian and English.

If you would like to learn more about the LGX DataHub, our database of structured data on 3,200 sustainable bonds, make sure to register for the session.

One of the leading real estate banks in Germany, Berlin Hyp AG, became the first bank to ever issue a sustainability-linked bond. As the Sustainability Performance Target is to reduce the carbon intensity of the bank's loan portfolio by 40% by 2030, the EUR 500 m issuance is aligned with the German plan to reach the Paris Agreement.

China Construction Bank issued a new EUR 800 m green bond under its updated GSS bond framework. The bank's decarbonisation targets are aligned with China's goals to have its carbon emissions peak by 2030 and to become carbon neutral by 2060.

KfW set another record with a new EUR 4 bn green bond, the largest green bond ever issued by a non-sovereign. The proceeds will finance renewable energy, energy efficiency and green buildings projects, as the banking group aims to issue up to EUR 10 bn in green bonds this year.

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