View of Luxembourg City, which is branding itself as a European hub for sustainable finance Copyright (c) 2014 Sergey Novikov/Shutterstock. No use without permission.

View of Luxembourg City, which is branding itself as a European hub for sustainable finance Copyright (c) 2014 Sergey Novikov/Shutterstock. No use without permission.

Luxembourg’s sustainable finance strategy lacks clear objectives, concrete measures and a timeline for the financial centre to truly change its ways, a group of environmental organisations said on Monday.

The government in February presented the strategy, which aims to help the country’s financial sector transition towards meeting environmental, social and governance criteria.

The  was born out of a sustainable finance  presented in 2018. Developed together with the UN environment programme, it presented a series of recommendations on how Luxembourg could contribute to the Agenda 2030 and Paris Agreement objectives.

But the strategy fails to provide a framework on how the financial centre will become aligned with the Paris Agreement or the UN guiding principles on business and human rights, a group of organisations--including Etika, Greenpeace, ASTM, Commission Justice & Paix, SOS Faim and Cercle de Coopération des ONG--said.

“Voluntary measures alone will not deliver the necessary change in the financial industry towards more sustainability,” the group said in a statement. It called for short, medium and long-term goals with clear measurable objectives.

With only a small portion of the financial centre investing sustainably, the strategy must “bring sustainable finance into the mainstream, while avoiding greenwashing and rebranding,” the group said.

The strategy aims to crowd in the private sector. For example, the Luxembourg Sustainable Finance Initiative will help financial sector players carry out climate scenario analyses and establish a monitoring framework to measure progress over time.

But the strategy “focuses on promoting sustainable finance initiatives without examining whether or not the initiatives in question lead to actual sustainable development in the real economy,” the NGOs said.

The finance ministry that Greenpeace “misrepresents the role that Luxembourg authorities can and should play in helping private actors meet their climate targets” in response to a on the financial centre’s carbon footprint.

Nicolas Mackel, CEO of Luxembourg for Finance, at the time said it is “not a workable avenue” for the government to mandate funds to invest more in sustainable assets.

“As a global financial player, Luxembourg needs to assume its responsibility to guide, monitor and regulate financial players and their operations, especially when it comes to safeguarding the environment and protecting human rights,” the NGOs said on Monday.