Although it is not already in all portfolios, sustainable finance is part of all the debates and all the promises of development in the European financial sector. In Luxembourg, it is also in the objectives of the government, which aims to become a true European hub for sustainable finance.
Various tools such as the Luxflag labelling agency and the Luxembourg Green Exchange at the Luxembourg Stock Exchange have already given it a certain reputation. But many actions still need to be initiated by stakeholders.
One of the problems is that the subject is vast, complex and sometimes misused. Hence the need to properly inform investors, but also financial players who are still far from mastering the issues of this new type of discipline.
Luxembourg has felt this need since the end of the last decade. The government responded by setting up the Luxembourg Sustainable Finance Initiative in January 2020. This non-profit association was founded by the ministries of finance and the environment (its two underwriters), Luxembourg for Finance and the High Council for Sustainable Development.
Since then, the LSFI has been building brick by brick and its team of three people has begun its first missions. "Our main objective is to become the central point for information on sustainable finance in Luxembourg", says Claire de Boursetty, its general manager.
The association is therefore there to guide people interested in sustainable finance but also to promote it. "Our strategy is based on three pillars", explains the manager, specifying that the LSFI, 18 months after its official launch date, is still a tool in the assembly phase.
Its first mission is to promote and ensure a better understanding of sustainable finance. It has therefore begun its work by setting up communication tools (website, newsletter, webinars, etc.) for professionals and the general public.
Identifying and guiding
In a second phase, it intends to analyse the needs and implement various actions. "For example, we are making sure that the players can keep up to date with regulations, but also that they know about all the training courses that exist in the field of sustainable finance and can choose the one that suits them," de Boursetty explains.
The third pillar aims to measure the progress made by financial market players in this area by focusing on the data aspect. In 2021, the LSFI has chosen to collaborate with the think tank 2 Degrees Investing Initiative. The latter offers open source measurement tools and will help players to measure the sustainability of their investment portfolio.
But on a daily basis, the association takes every opportunity to highlight the ins and outs of sustainable finance, which remains a great unknown for many despite its popularity.
Originally published in French by Paperjam and translated for Delano