The sixth Global Landscapes Forum (GLF) Investment Case Symposium, which will bring together institutional players as well as investors involved in sustainable finance, will focus on a variety of topics, such as climate finance, nature conservation or strengthening forestry, Nicoletta Centofanti told Delano during an interview. Centofanti was interim general director of the LSFI from May 2022 to March 2023; as of early March 2023, she is now the general director.
So what is the LSFI?
The LSFI is a not-for-profit association that was founded by the government, in particular the ministry of finance and the ministry of environment, Luxembourg for Finance (LFF) and the High Council for Sustainable Development (CSDD), explained Centofanti. It aims to raise awareness, promote and help develop sustainable finance initiatives.
We want to give solid support and guidance to the sustainable finance community.
“We have been appointed as coordinating entity for all actors active in the space of sustainable finance in Luxembourg. And we have been mandated by the government to draft and implement the Luxembourg sustainable finance strategy,” she said. “Our mission is to raise awareness on sustainable finance and help the sector further transition towards increased sustainability.”
The LFSI also works with the players in the financial, development finance, and innovation and education sectors, as well as NGOs and civil society, to work on synergies and avoid duplications, added Centofanti.
How does the LSFI foster sustainable finance?
The LSFI’s action plan has three pillars, explained Centofanti: awareness and promotion, unlocking potential, and measuring progress. For the first pillar, the LSFI hosts technical webinars, as well as sessions to raise awareness amongst companies and academia. It also produces sustainable finance publications and a monthly newsletter.
“On unlocking potential, we want to give solid support and guidance to the sustainable finance community,” said Centofanti, which is the second pillar. “We gather all the initiatives, frameworks, standards and tools that are available. And in terms of trainings, we also gather all the trainings.” Over 150 instruments and 111 training courses have been mapped to date.
There is a strong interest for sustainable finance products.
The LSFI has also launched working groups. “The first one to be launched was on sustainable finance education and training, which is a key fundamental aspect that has to be developed,” Centofanti highlighted. It was important to assess potential gaps and areas of improvement to make sure that the sector was provided with the right kinds of training, she said.
This first working group was launched in November 2022. A second working group dedicated to climate reporting and measurement was “just launched,” said Centofanti. “The members were announced the day before yesterday [editor’s note: this interview took place on 3 March], and basically the kickoff will be held at the end of March.”
Two additional working groups--on ESG data and innovation / retail products--are foreseen for later 2023 and early 2024.
“Pillar three is basically focused on measuring progress,” said Centofanti. “The idea is to support the sector in identifying a framework to measure where we stand and how we are progressing.” The LSFI’s first initiative was in 2021, when it launched a climate scenario analysis using a methodology called Pacta. “The methodology helps financial institutions assess how their portfolios or loan books [are] aligned to Paris Agreement objectives,” she explained.
The LSFI also conducted a survey in 2022 with the CSSF, Luxembourg’s financial regulator, and the Fondation ABBL to investigate the general public’s understanding of and interest in sustainable finance. “In general, we understood that there is a lack of knowledge and need for additional information,” said Centofanti, but “there is a strong interest for sustainable finance products.”
An additional initiative carried out by the LSFI was a study on sustainable finance in Luxembourg, which explored sector trends and strategies and was published in December 2022.
“All these pillars [allow] for us to better structure our work, but these pillars are very much interlinked and interconnected,” said Centofanti. “Whatever we do in pillar two and pillar three will be then used to raise awareness and help sustainable finance advance.”