LONDON, May 18 (IFR) - The Luxembourg Green Exchange (LGX)
is opening a segment dedicated to sustainable and social
projects bonds, a sector valued at over US$23trn, as it looks to
broaden the universe of socially responsible instruments listed
on its platform.
While Green bonds initially spearheaded socially responsible
investments, the asset class has broadened out in recent times
to so-called SRI bonds that finance various projects, ranging
from education, healthcare and social cohesion.
"Since the launch of LGX, there's been a push, from both
investors and issuers side, to expand the Green bond market from
simply a climate remit to other aspects of socially responsible
investment," said Robert Scharfe, CEO of the Luxembourg Stock
The global value of SRI products and strategies amounts to
more than US$23trn, according to the Global Sustainable
The new segment on the Luxembourg Stock exchange will
increase the visibility of Sustainable and Social (S&S) projects
and facilitate their financing.
Ten securities, with a combined value of over €5bn, are
already displayed in the new window. BNG, Council of Europe
Development Bank and ICO are among the issuers represented.
Eligibility categories of S&S projects include socioeconomic
advancement and empowerment, affordable housing and food
The LGX was launched in September 2016 and now lists over
€50bn of Green bonds from 27 international issuers. Due to the
flexibility offered by sustainable bonds, allowing for a much
broader range of projects than just Green, they are likely to
produce a larger market. For the same reasons, they can attract
more corporates to issuing such instruments, according to the
Issuers will have to follow a similar process as they would
to list a Green bond in order to be listed. They must commit to
disclosing detailed information relating to planned use of
proceeds, provide an ex-ante external review, as well as a
post-issuance report presented regularly throughout the lifespan
of the security.
As with Green bonds, transparency will remain the focal
point in mainstreaming this instrument.
(Reporting by Matt Painvin; Editing by Helene Durand, Philip