LGX DataHub: Understanding the real-world impact of sustainable bonds

Net zero pledges are gathering momentum worldwide, driven by mounting concerns around the alarming rate of climate change and its impacts on our societies. With an ever-pressing need to address environmental, social and governance (ESG) issues, governments and businesses alike are turning to structured sustainable bond data to mobilise investments for the green transition and the global goals.

Growing demand from asset managers and investment banks

Today, access to reliable data is essential to make informed investment decisions that align with environmental and social goals. Investors are increasingly seeking to understand the impact of their investments and how it’s having a tangible, positive effect on the real world, as they strive to better measure the environmental and social impact of their debt portfolios and actively participate in global efforts towards a more sustainable future.

In parallel, issuers of debt products are striving to meet the growing demand for sustainable investment opportunities, adhere to the surge of new sustainability regulations across industries, and finance their transition via capital markets. As the demand for sustainable bond data continues to grow, so does the need to close the sustainable bond data gap across developed and emerging markets.

Structured and comparable data helps build trust and credibility in sustainable finance and makes it easier for investors to assess the environmental and social impact of their investments and ensure that the intended outcomes are being met.

Closing the data gap is particularly vital in emerging markets, which often lack established frameworks and face greater environmental and social challenges, making reliable data essential to attract investment and drive sustainable development in these regions.

A global view of the GSSS bond market

Realising the growing need for sustainable bond data, the Luxembourg Stock Exchange (LuxSE) introduced the LGX DataHub in September 2020, a centralised database housing structured sustainability-related data points on sustainable bonds.

At the time, data on sustainable bonds took many shapes, which meant that – even though the data was there – investors, asset managers and the wider financial industry often found it hard to compare different data sets and translate the available data into actionable insights.

Today, the LGX DataHub includes up to 150 data points on more than 14,000 listed green, social, sustainability and sustainability-linked (GSSS) bonds from over 3,000 issuers worldwide – in other words, it covers close to the entire universe of listed GSSS bonds in one, centralised database.

Empowering investors and asset managers

By housing data on close to the entire universe of listed GSSS bonds, the LGX DataHub allows asset managers to produce impact and allocation reports automatically at portfolio level.

It makes it easy for investment banks to perform research for clients and learn more about best practices which ultimately helps them drive their sustainable issuance journey forward.

It also allows users to perform more comprehensive and in-depth analysis of sustainable bond data, make better informed investment decisions, compare the green and societal impact of different investment opportunities and better assess the quality of the reporting provided by the issuer.

On a more detailed level, the LGX DataHub also makes it possible for investors and asset managers to monitor Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs) for sustainability-linked bonds.

And for GSSS bonds, it allows them to gain clarity on EU Taxonomy alignment at bond level, access meaningful post issuance allocation and impact data, as well as the data they need to meet their reporting requirements.

Trusted by ICMA, the OECD and the European Commission

As the scope of the LGX DataHub expanded, so too did its adoption by key players within the capital markets industry and beyond. In May 2023, the International Capital Market Association (ICMA) unveiled its new sustainable bond database, entirely fed and powered by the data available on the LGX DataHub.

The following month, the Organisation for Economic Co-operation and Development (OECD) published its paper on green, social and sustainability bonds in developing countries using data sourced from the LGX DataHub.

At the start of 2024, the European Commission became the latest entity to join the growing cohort of LGX DataHub users, gaining access to essential information and structured data on the sustainable bond universe.

Aggregated data now openly available

To mark the third anniversary of the LGX DataHub, in September 2023, we decided to open the overall LGX DataHub dashboard to the public in an effort to support transparency and make sustainable finance more accessible.

Moving forward, all those who visit the LGX DataHub will enjoy free access to aggregated figures on close to the entire GSSS bond market.

Sustainable finance is a mission that we must all embark on together if we are to meet our global goals. Structured and meaningful sustainable bond data is and will continue to be key to mobilising private investment for sustainable development.