The LSFI, a not-for-profit association that aims to raise awareness, promote and help develop sustainable finance initiatives in Luxembourg, has published a report that focuses on training needs and gaps analysis in the Luxembourg financial sector.
Published on 7 July, the report presents the results of a working group that included professionals from the Luxembourg Banker’s Assocation (ABBL), Blackrock, Banque Internationale à Luxembourg, PwC, the European Investment Bank, the University of Luxembourg, Luxflag and other financial institutions, research organisations and firms.
“With this working group, we wanted to understand better what the newly needed skills are, where the Luxembourg sustainable finance training offering stands, what are the gaps and how we can cover them,” said Nicoletta Centofanti, general manager of the LSFI.
Training gaps to address
The report highlighted several topics that required more attention:
-Analysis from the working group found a gap in training amongst client-facing roles--such as customer service, insurance agents or corporate client officers--in selling ESG products.
-There is a lack of advanced training on topics including sustainable governance, private equity and retail investing.
-Credit specialists need specific, advanced training courses on the key definitions, factors and risks of sustainable finance, ESG and climate risk, and ESG risk & return applications.
-There are no advanced courses for impact investing, inclusive finance and blended capital, for insurance products, or for ESG integration in tactical and strategic asset allocation.
-Asset servicing, depository, middle and back-office positions have training gaps in several topics, such as ESG integration in stock and bond selection and analysis, ESG and real estate investing, ESG and private equity investing, or fintech applications to support sustainable finance. In addition, the report noted that there was an “overall lack of training” across various job profiles in the fintech domain.
Outlook and solutions
“In general terms, the Luxembourg sustainable finance training offering presents a high degree of completion,” said the LSFI report. Various institutions provide a diverse offer of courses, several themes are covered and different job profiles are taken into account. The report also notes that there are 24 training courses on sustainable finance offered by Luxembourg players alone--and expects that figure to grow--while also offering suggestions as to how the training gaps could be addressed.
Topics to be addressed in the short-term (within one year) include: how to sell and/or market an ESG product, training on impact investing and blended finance, boosting sustainable governance, ESG integration in stock and bond selection and analysis, ESG and private equity investing, and banking products and services.
Medium-term points to address include topics such as: fintech applications to support sustainable finance, launching discussions with Luxembourg’s insurance association on insurance products, ESG integration in tactical and strategic asset allocation, training sessions on how ESG ratings are built, or climate scenario analysis.
Long-term priorities--those to be addressed in two to three years--include training sessions on ESG benchmarks and implications related to the insurance distribution directive (IDD) and packaged retail investment and insurance products (Priips), said the LSFI.
The working group will meet in six months, noted the LSFI, in order to reassess the training offer and see how to best address the identified gaps. It will also engage with CEOs in Luxembourg’s financial centre to better understand what skills employees will need in the sustainable finance domain.
Find the Luxembourg Sustainable Finance Initiative’s full report here.