FINANCE - MARKETS

Sustainable Finance Forum

“Need to speed up the transition to sustainable finance”: Mackel



Nicolas Mackel (Luxembourg for Finance) chaired the fourth edition of the Luxembourg Sustainable Finance Forum, during which Mairead McGuinness, European Commissioner for Financial Services, Financial Stability and Capital Markets Union spoke. Pierre Gramegna, Minister of Finance, also participated in the event. (Photo: Nelson Coelho/@nelsoncoelhofilms)

Nicolas Mackel (Luxembourg for Finance) chaired the fourth edition of the Luxembourg Sustainable Finance Forum, during which Mairead McGuinness, European Commissioner for Financial Services, Financial Stability and Capital Markets Union spoke. Pierre Gramegna, Minister of Finance, also participated in the event. (Photo: Nelson Coelho/@nelsoncoelhofilms)

The fourth edition of the Luxembourg Sustainable Finance Forum was held on 26 and 27 October.  Nicolas Mackel, CEO of Luxembourg for Finance, looks back on the event and speaks about the grand duchy’s role in the green transition.

What should we take away from the debates of this 2021 edition? Was there one sentence that particularly caught your attention?

Nicolas Mackel: The main message is that we need to speed up the transition to sustainable finance. The study presented at this forum shows that the march towards sustainable finance is well underway and that the financial industry is on board, but that this march is very slow, even if it has made progress recently. Insofar as we have decided to reduce emissions by 55% (compared to 1990 levels) by 2030 and to become carbon neutral by 2050, this is indeed a transition of our economy and the role of banks, asset managers and insurers is to help companies finance their transformation.

The second message is that sustainable finance goes beyond environmental objectives to include the S and G of ESG, the social and governance objectives. The pandemic has helped to highlight the importance of goals such as health, education, affordable housing, etc. EU Commissioner Mairead McGuinness, responsible for financial markets, financial stability and capital markets, has said that sustainable finance is no longer just a 'nice to have', but is now 'a necessity'.

What new avenues have opened up and where do we go from here?

The various speakers mentioned several areas. The two main ones are innovation in financial products and training of professionals. For the first, Julie Becker [CEO Luxembourg Stock Exchange] mentioned sustainability bonds, so bonds whose return is linked to the achievement of sustainability objectives.

For the second, sustainable investments require training our professionals in new areas. The acceleration of the penetration of sustainable finance in all sectors of finance requires adequate training of teams, and therefore both authorities and companies must increase investment in human capital.

How can Luxembourg be part of this process?

Luxembourg is widely recognised as a pioneer and leader in sustainable finance. Several speakers have underlined this, first of all commissioner McGuinness. Obviously, Luxembourg cannot and will not rest on its laurels. As a leading fund structuring centre, it is Luxembourg’s responsibility to help drive forward sustainable finance in the country. This will involve staff training, but also overseeing regulatory compliance to ensure taxonomy is respected and therefore ensure investor confidence.

This story was first published in French on Paperjam. It has been translated and edited for Delano.

Correction: A previous version of this article included incorrect dates for the conference.