The Luxembourg Stock Exchange (LuxSE) has launched the world’s first platform for green financial instruments.
Luxembourg Green Exchange (LGX), which opened today, will be home to the majority of 114 green bonds listed on LuxSE worth more than $45 billion (£34.6bn).
Access to the new platform is limited as it will only gather issuers who dedicate 100% of the raised funding to green investment.
Robert Scharfe, CEO of LuxSE said: “An issuer who does not meet LGX eligibility criteria can still list on our markets but the bar is higher for entry to LGX. Having said that, we encourage issuers to go further than the minimum requirements and really leverage this platform to create new standards on the quality of communication with investors.”
LGX is aimed at setting “a new benchmark for the rapidly evolving green securities market”, according to LuxSE.
The green finance platform has been developed in line with best practices set out by Climate Bonds Initiative, International Capital Market Association (ICMA) and World Wildlife Fund (WWF).
Mr Scharfe added: “New issuance of green securities has taken off since COP21. There is a real desire for change. The green market has enormous potential but this needs to be matched by interest from investors. By setting strict standards for green securities, LGX aims to create an environment where the market can prosper.
“The upcoming COP22 event will focus on preparations for the Paris Agreement to enter into force. With LGX, a dedicated platform for both issuers and investors, we are granting the solution for financing green projects.”
According to a report by Climate Bonds Initiative, the global climate-aligned bonds market is worth $694 billion (£527.2bn).