Luxembourg sustainable finance

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Luxembourg Sustainable Finance Roadmap

Shaping the future of a sustainable economy in Luxembourg

Last 4 October, the Luxembourg Government presented its report on the Sustainable Finance Roadmap for Luxembourg. The initiative was launched by the Ministry of Finance and the Ministry of the Environment in partnership with the United Nation Environment Programme Finance Initiative (UNEP FI).

The aim of the Sustainable Finance Roadmap is not only to understand the current market trends and the Luxembourg initiatives in that field, but also to develop a strategy. The aim of this strategy is to make the financial sector more sustainable, to connect the capital flow to sustainability, to maximize resources efficiencies and to dissociate economic growth from harmful environmental and social impact.

The Roadmap proposal highlights five initiatives that should be launched simultaneously to support the financial ecosystem of our country. These initiatives are transforming and upgrading the financial culture, improving market practices, reviewing the use public balance sheets and directing finance through policy.

The report describes the key success factors that will be part of the Roadmap to a more sustainable finance. Among them, the report insists on the need for more collaboration and a common vision that private and public institutions should share. The public sector needs to set up long-term objectives, design the regulatory framework and raise awareness, while the private sector needs to scale-up sustainable finance practices, aggregate the demand and standardize financial instruments, serving as a relay between retail investors and the real economy.

The Roadmap proposes policy options to ease the access to sustainable finance, to support asset managers with expertise and to provide sustainable enterprises with long-term funding. The recommendations emerging from the policy options are the following:

  • Setting up a high level coordination entity as a public-private-partnership entity covering all aspects of sustainable finance with working groups developing sector specific initiatives and roadmaps
  • Create a “Center for Sustainable Finance” as well as regular learning and sharing events and integrate sustainability in our nation branding
  • Integrate sustainability in training, research and education to increase the expertise of practitioners and future financial experts 
  • Redesign tax and incentives to support the transition towards a more sustainable finance
  • Develop tools and technologies to develop sustainable products
  • Measure the progress in the sustainable finance development

Finally, the report shows that although the Luxembourg market has already developed sustainable finance initiatives and products, there is still a need to shape the road to achieve the full integration of sustainability within the financial world. The success of this initiatives lies, among others, in the collaboration of all partners and in the development of expertise within the market.

“Sustainable Luxembourg, let’s make it happen”.

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