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.
2018 was the year that saw the amount of green, social and sustainable instruments on LGX double when compared to the end of 2016. With a further expansion of its scope of instruments and closer ties with China forming in the name of sustainable finance, 2019 would prove to be yet another period of increased reach and international recognition, coupled with rapid growth.
In the year where the world’s leaders descended on Madrid for COP 25, organised by the governments of Spain and Chile, global green bond issuances hit a new record of USD 257.7 billion, as reported by the Climate Bonds Initiative (CBI).
The role played by LuxSE and LGX in driving this growth was highlighted when our leadership collected the Green Bond Listing Venue Award at Climate Bonds Initiative’s 2019 Green Bond Pioneer Awards. Our exchange also maintained its coveted title of ‘Exchange of the Year’ for the third consecutive year at Environmental Finance’s annual Bond Awards.
However, in between award ceremonies, important steps were also being made further afield by LuxSE’s leadership to ensure that sustainable finance became a top priority for a growing group of institutions across the world.
During a 10-day tour of South America, LuxSE’s leadership met with more than 20 stock exchanges and financial institutions in Argentina, Chile, Colombia and Peru. The trip was the occasion to sign a Memorandum of Understanding with the Santiago Exchange, focusing on green and social bonds issuance in Chile and Luxembourg.
With the sustainable finance agenda and mission of LGX now spreading to new parts of the world, it wasn’t long before LuxSE and the Nigerian Stock Exchange joined forces to promote the cross listing and trading of green bonds in Nigeria and Luxembourg.
Ensuring that all markets – including emerging markets such as those in South America and Nigeria – can access and participate in sustainable finance is a commitment that only grew stronger for LGX in the months and years that followed.
Another important initiative that came from our exchange that year was the release of LuxSE’s Guide to ESG Reporting in October. These ESG Guidelines serve as a compass for users when identifying ESG activities and defining an ESG strategy. It advises market participants on the process for data collection and processing and offers advice on how to select the most relevant reporting frameworks and therefore produce the most efficient and meaningful ESG-related reporting.
As 2019 came to an end and ESG became a more prominent feature in both issuers’ and investors’ thinking, what lay ahead in the year of 2020 would see the ‘S’ of ESG become more important than ever with LGX welcoming unprecedented amounts of social and sustainability bonds in response to the COVID-19 pandemic.