Though the fossil fuel reduction part of climate action wasn’t really tackled, the Cop27 climate conference resulted in a loss and damages fund for countries most vulnerable to climate-induced catastrophes. Luxembourg, as a part of the EU, vowed to contribute to the fund--€10m of its €220m international climate envelope--on top of other contributions.
For Raymond Aendekerk, director of Greenpeace Luxembourg, “It is good that small Luxembourg is committed to climate protection at European and international level, both diplomatically and financially.”
“Luxembourg also has a great obligation to commit itself with a fairly large ecological footprint and with fairly good financial means. We also have a great reputation at international level and it is good that we use this fact for the transition that we need to make quickly,” he told Delano.
Financing the transition
The Luxembourg Stock Exchange (LuxSE) and Luxflag were present at the climate conference and demonstrated the grand duchy’s willingness to move towards a fairer transition.
LuxSE co-organised a side-event with the Global Green Growth Institute to explore how Luxembourg’s financial ecosystem could contribute to accelerating sustainable finance in Africa.
Among the recommendations LuxSE’s CEO Julie Becker and head of sustainable finance Laetitia Hamon shared were calls for investors to help finance the transition in the regions most affected by climate change despite having low carbon footprints, the need to keep supply chains and SMEs in mind, investing in gender equality and the role of capital markets and international cooperation in guaranteeing a ‘just transition’.
In a statement following the event, the institution said that “LuxSE has officially committed to increase its collaboration with GGGI and participate in the implementation of GGGI’s programmes in developing countries, through capacity building and by advocating for more sustainable investment solutions.”
Luxflag in its own side event looked at the role of impact investing in the mitigation of climate change, and identified market challenges investors and asset managers face in their path to a more sustainable economy. Here, the institution highlighted the need for improving the traceability of sustainability metrics in emerging markets and the importance on developing green taxonomies that take into consideration environmental risks and create a framework to collect data that could demonstrate a positive impact.
The importance of a stricter regulation in impact investing is also key to avoid greenwashing and allow fair competition, Luxflag said in a written statement following the event.
LuxSE was not able to respond to Delano’s request for comments following the Cop27. Luxflag had not yet responded by the time of publication.