The Luxembourg Stock Exchange launched the Luxembourg Green Exchange, which it says is the first platform for green securities.
Only issuers that comply with “stringent eligibility criteria” may gain access to the platform, which aims to set a new benchmark for the green financial instruments market.
LGX, which launched Tuesday, lists issuers that dedicate 100% of their fundraising to green investments. It immediately becomes home to the majority of the 114 green bonds that are listed on the Luxembourg Stock Exchange, which have a total value of more than $45 billion. The exchange is open to all green securities but currently is mainly all bonds currently.
“There is a real desire for change,” said Robert Scharfe, CEO of Luxembourg Stock Exchange, in a news release. “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.”
Eligibility criteria includes a clear statement during the application process for listing of the intended “green nature” of the security, a clear disclosure that proceeds are exclusively used to finance or refinance 100% green projects, and a commitment by the issuer to provide both independent external review and ex-post reporting. The release said this final requirement is “unprecedented on the market.”
The LGX platform has been developed in line with best practice set by the Climate Bonds Initiative, International Capital Market Association, and the World Wildlife Fund.