LGX hits EUR 1 trillion mark
A milestone 8 years in the making
LGX has come a long way since its groundbreaking launch in 2016. From the world’s first platform dedicated exclusively to green bonds, it later went on to cover a range of sustainable debt instruments before growing into the reference venue for the full suite of sustainable finance education, data, and assistance services it is today. In other words, the journey towards encompassing EUR 1 trillion worth of outstanding GSSS bonds has been one of continuous evolution.
But let’s not forget that LuxSE’s first steps into the GSSS bond sphere started well before LGX became a reality. The story goes all the way back to 2007, when the world’s first green bond – the European Investment Bank’s inaugural Climate Awareness bond – was listed on the exchange. That’s why reaching this new milestone and helping to make EUR 1 trillion worth of GSSS bonds available to investors is a moment of celebration and validation for LuxSE.
Driving positive change
Fast forward from the launch of LGX in 2016 to the present day and the LGX platform, as of 31 January 2024, serves 310+ issuers from 60 countries, which together have issued more than 1,900 GSSS bonds in 41 currencies. The LGX community of issuers include supranational institutions such as the European Union, multilateral development banks, financial institutions and corporates across a range of different sectors.
Reaching the EUR 1 trillion mark is not just a milestone for LGX, but a positive sign for the sustainable finance industry as a whole. It is a testament to all the communities and people whose lives have improved because of the green and social projects financed by these bonds, and to the issuers that have found increasingly ambitious ways to reshape the conventional constructs of debt securities to accelerate their green transitions and drive sustainable development across the world.
From the renewable energy projects made a reality through green bonds, to improvements in education, health and affordable housing financed through social bonds, and ambitious Key Performance Indicators (KPIs) that work towards a more inclusive and sustainable world through sustainability-linked bonds, the EUR 1 trillion that has been raised through the 1,900 sustainable bonds currently displayed on LGX has helped address some of the most pressing challenges of our time.
Increasing the scope
From when the world’s first green bond was issued in 2007, it took 12 years to reach USD 1 trillion of cumulative GSSS issuance. Then, the pace of issuance increased exponentially, especially in response to the COVID-19 pandemic, and 2021 saw USD 1 trillion worth of GSSS bonds being issued globally in a single year.
2020 and 2021 also proved to be pivotal years in the evolution of LGX as it transformed its scope beyond a platform dedicated to sustainable securities. The year 2020 saw the launch of the LGX Academy and LGX DataHub.
Since then, the LGX Academy’s expert lecturers have brought sustainable finance education and actionable case studies to hundreds of participants hailing from countries across Europe, Latin America, Africa and Asia.
The LGX DataHub has also experienced remarkable expansion since its launch in September 2020. What started as a structured sustainable bond database on the GSSS bonds displayed on the LGX platform now includes structured and granular sustainability data on more than 14,000 GSSS bonds listed worldwide – meaning close to the entire universe of listed sustainable debt instruments. Thanks to this structured data, investors and asset managers can easily compare the green and societal impact of different securities and access the data they need to comply with new reporting requirements.
Making sustainable finance truly global
The lead-up to this EUR 1 trillion milestone has also been marked by many important developments aiming to reorient sustainable capital flows towards where they are needed the most – in emerging markets and within the realm of gender equality and women’s empowerment.
In 2022, following a Memorandum of Understanding with UN Women, a special gender-focused bond flag was implemented on the LGX platform to help investors easily identify securities that allocate all or a portion of their proceeds to projects or objectives that contribute to gender equality and women’s empowerment.
Contributing to channelling investment into emerging markets has also become a key priority for LuxSE’s work through LGX. These regions, which are experiencing the most devastating effects of climate change, are most in need of financing for their green transition and sustainable and inclusive development.
That’s why in recent years, in addition to providing sustainable finance trainings and capacity building to market participants operating in these regions, LuxSE has entered into several strategic partnerships with exchanges in Chile, India, Rwanda, Cabo Verde as well as the Western Africa regional exchange, to name just a few. Through these partnerships, numerous GSSS bonds have been brought to international investors via LGX, including a bond focusing on the blue economy issued by Cabo Verde-based iib, and the first gender bond from Sub-Saharan Africa issued by Tanzania-based NMB bank.
Transforming capital markets
Innovation and rapid market developments have helped pave the way during the nearly 8 years since we established LGX but one thing that has remained the same since the very beginning is our mission – to mobilise investment for sustainable development and help drive concrete progress towards the Paris Agreement and UN SDGs.
As we reflect on this important milestone and what it means for capital markets, we would like to thank all our issuers for bringing their sustainable debt instruments to LGX as well as our international partners for their trust and close cooperation.
We look forward to contributing to bringing the next EUR 1 trillion worth of GSSS bonds to the market through LGX, thanks to our shared commitment to build a more inclusive and sustainable economy together – one bond at a time.
