Luxembourg has signed an agreement to back a UN Environment-convened network that helps the world’s major financial centres to accelerate green and sustainable finance.
It is providing $500,000 (£384,491) in funding to the International Network of Financial Centres for Sustainability (FC4S), which currently has 22 members so far from Europe, Asia, Africa and North America.
They have committed to shift their investments to support the goals of the Paris climate agreement and the 2030 Agenda for Sustainable Development.
The levels of green and sustainable finance needed to deliver on the Paris deal and the sustainable development goals are still insufficient – the World Resources Institute estimates $5.7 trillion (£4.4tn) will need to be invested annually in green infrastructure by 2020.
However, a 2018 UN research found while climate finance is growing, it had only hit $681 billion (£524bn) a year by 2016.
Luxembourg has committed to financial innovation and sustainable finance, which led to the launch of a wide range of initiatives, including the first Stock Exchange dedicated to green, socially responsible and sustainable securities called the Luxembourg Green Exchange (LGX) in 2016.
It currently has the largest market share of listed green bonds worldwide.
Stephen Nolan, Head of the FC4S network said: “Financial centres are key pressure points in the global financial system and FC4S members like Luxembourg are pressing hard to make the system sustainable. This contribution from Luxembourg is yet another sign that the smart money is getting behind sustainability.”
Pierre Gramegna, Minister of Finance of Luxembourg added: “This commitment is aimed at helping the FC4S to better connect financial centers, to foster exchange of knowledge and thus help shaping the trends and developments that will define sustainable finance in the years to come.”