The history of LGX: Diving back to 5 years of growth
In this special series of articles, we look back at each year of milestones of the Luxembourg Green Exchange (LGX) from its creation in 2016 to its 5th anniversary celebration in September 2021.
In 2016, while sustainable finance was still in its infancy, the Luxembourg Stock Exchange (LuxSE) created LGX, a platform exclusively dedicated to labelled green bonds at the time of launch. Turning voluntary market standards into mandatory requirements, LGX led the way by putting the spotlight on sustainable securities under enhanced criteria of transparency.
This bold and ground-breaking move was just the first of many that would lead LGX to become the world’s first and still leading international platform dedicated to sustainable finance securities.
As the reference listing venue for Sovereign, Supranational and Agency (SSA) issuers, which dominated the green bond market in its first few years, the journey of LuxSE in sustainable finance had actually started almost ten years before the official launch of LGX.
Back in 2007, the European Investment Bank chose our exchange to list what is widely considered to be the world's first ‘green bond’, i.e. their ‘Climate Awareness Bond’. In 2008, the World Bank brought its pioneering green bond to Luxembourg too. In the following years, the volume of green bonds listed on LuxSE increased steadily as the market started to shift its attention to this type of instrument.
Jump forward to 2016, we launched LGX to actively contribute to the ambitious Paris Climate Agreement and the UN Sustainable Development Goals (SDGs). We made it our mission to help market participants raise funds with the global investor community to transition towards more low carbon and inclusive models.
What better way to start the journey than with green bonds? Such securities were already a trailblazer for the market and were set to become one of the most efficient tools to gather project-specific financing to get closer to the aforementioned international objectives. LGX was in the right position to promote convergence around the highest standards of transparency to boost investors trust and, therefore, market integrity.
To bridge communication between issuers and investors, LGX made information about the destination of the funds and their impact a mandatory condition for a green bond to be displayed on the platform. By shedding a light on the disclosure efforts of green bond issuers, LGX also provided them with the opportunity to raise awareness of their green projects and commitments.
Our teams did not stop there. Since the creation of LGX, they have continuously worked to promote convergence around product-specific disclosure levels in line with the best market practices.
Even with the platform gradually expanding from green bonds to other sustainable debt securities, our mission has not changed. LGX still stands for excellence, transparency and integrity and aims to unlock massive amounts of capital to advance sustainable progress and provide valuable investment opportunities to sustainable investors.