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.
While 2017 proved to be a year of rapid expansion for LGX, it didn’t stop there. In May 2018, after broadening the scope of the platform to include social and sustainability bonds the year before, LGX set up three new dedicated windows for labelled ESG, green and social funds. This innovative move made LuxSE the first exchange to recognise best-in-class funds in the sustainable space under objective transparency criteria – an introduction that would go on to play a key role in facilitating the broadening of the sustainable finance market beyond the bonds which kicked its growth off.
May 2018 also brought about another key milestone in the history of LGX when the capital raised through sustainable bonds displayed on the platform reached USD 100 billion, with the listing of a green corporate bond from Tianjin Rail Transit – a railway company based in the Chinese city of Tianjin.
Just a few months before LGX’s second anniversary, momentum began to gather in terms of bridging the gap between the Chinese domestic green bond market and the global investor community. This move would ultimately open up the country’s expanding bond market to a much more international investor base. Our exchange quickly became a trusted driving force in a number of initiatives that would make the Chinese domestic green bond market much more accessible worldwide. It started with ADBC bringing a RMB 3 billion green bond to LGX in March, making it the first Chinese domestic bond to align with international standards and be displayed on an international exchange.
Later that summer, in June 2018, LuxSE together with the Shanghai Stock Exchange launched the Green Bond Channel – a revolutionary channel, offering international investors access to information in English on Chinese domestic green bonds listed in Shanghai, while also enhancing the visibility of local bonds through their display on LGX. This cooperation with the Shanghai Stock Exchange brought information on Chinese domestic green bonds to the international investor community unlike ever before. This move once again saw the international sustainable finance market benefit from the trailblazing mission of LGX to make the market more accessible to all.
Knowing that access to such information would enhance investment channels between China and Europe, the launch was widely welcomed by the international investment community, ultimately leading to LuxSE signing a tri-party agreement with Shanghai Stock Exchange and Bank of China in September 2018 to ensure the further development of the Green Bond Information Channel.
There were many other milestones throughout 2018 that all play a part in the growing role of LGX in sustainable capital markets. However, if there was one overarching theme guiding LGX’s strategic developments in 2018, that was cross-border cooperation.