Capital markets

The Luxembourg Stock Exchange becomes the first stock exchange globally to introduce a platform for green financial instruments. The Luxembourg Green Exchange (LGX) went live on 27 September 2016.

By launching the first Green Exchange in the world, the Luxembourg Stock Exchange (LuxSE) makes a bold move ahead of COP 22. Indeed, the Luxembourg Green Exchange (LGX) marks the first time that a stock exchange requires green securities to adhere to strict eligibility criteria, including:

  • Self-labelling as green or equivalent (e.g. climate-aligned): the issuer must clearly state, during the application process, the intended green nature of the security.
  • Use of proceeds: clear disclosure that the proceeds are exclusively used for financing or refinancing projects that are 100% green, according to the GBP or CBI eligibility taxonomy.
  • Ex-ante review and ex-post reporting: issuers commit to provide both independent external review and ex-post reporting – a requirement unprecedented on the market.

Access to LGX is banned for securities on the excluded categories list comprising of, but not limited to nuclear power production, trade in CITES, animal testing for cosmetics and other non-medical products, medical testing on endangered species or fossil fuels.

The LGX concept has been developed in line with best practices set out by Climate Bonds Initiative, International Capital Market Association (ICMA) and World Wildlife Fund (WWF).

More information can be found here.