As a leading financial centre Luxembourg is in a position to have a huge impact on sustainable development and finance, highlights the environmental nonprofit organisation. Total assets under management governed by investment funds domiciled in Luxembourg crossed the €5trn mark in the beginning of 2021. Many of them are still invested in fossil fuel companies. The 100 largest Luxembourg funds financed the equivalent of four times the direct greenhouse gas emissions of the grand duchy, claims Greenpeace in its

The NGO called for strengthening the criteria for sustainable investment products in Luxembourg, establishing transparency of all financial products and introducing measures to reduce investments in fossil fuel companies. The sustainable investments label creates a risk of greenwashing, says Greenpeace, whose found that sustainable funds hardly drive more money to sustainable companies than conventional funds. Clearly defining what such investments are is considered essential for transitioning to a sustainable management of the world’s resources, says Greenpeace.

In February 2021 the government presented its sustainable finance strategy, aiming to help the country’s financial sector transition towards meeting environmental, social and governance criteria. Developed together with the UN environment programme, it features a series of recommendations on how Luxembourg could contribute to the Agenda 2030 and Paris Agreement objectives.

Greenpeace referred to the strategy in its open letter saying it lacked ambitious measures and objectives to meet international challenges.