About a year ago, the Luxembourg government had announced the launch of the of the Green Exchange, the first exchange related to climate change in the world. This year, the first results indicate how successful it was: it has listed bonds worth 63 billion euros. Our lawyers in Luxembourg can offer more information on the listing requirements on the local Stock Exchange.
With a growing number of companies and investors interested in climate changes, the Luxembourg government speculated the importance of this industry and launched the first Green Exchange which allows the trade of climate-related bonds, securities and other financial instruments which now seems a very inspired decision. This is because it has registered a spectacular result after its first year of life: 63 billion euros in revenue. The result was so good it even took by surprise economists.
The amount raised by the Luxembourg Green Stock Exchange which is known among investors as the LGX now represents 1% of the Luxembourg Stock Exchange when it comes to the value of the assets listed. This trend was picked up at global level, where the green bond market attracted investors who bought assets worth 95 billion USD in 2016. By the end of this year, the global green bond market is expected to reach 140 billion USD.
The LGX was set up last year with the purpose of ensuring investors that the bonds they buy are actually green. Even if until now, Luxembourg has not created a specific legal framework for green financial instruments, the Luxembourg Financial Regulator has issued a code called the Green Bond Principles, also known as the Climate Bond Initiative which provides for the documentation which must accompany the bonds before and after being issued.
The LGX is continuing to attract clean energy companies from countries like China, the United States and from Latin America. Several European companies operating in the same clean energy industry have started issuing bonds, however they have not announced them as green, which is why the European market is still on hold when it comes to the issuance of such bonds.
Our law firm in Luxembourg can offer full information on the requirements related to listing bonds on the Stock Exchange, so do not hesitate to contact us.
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