Despite political turbulence caused by doubt about the new US administration’s commitment to the Paris Agreement of 2015, the green bond market has managed to make strides forward in the last year, with issuance so far this year already almost half of 2016’s $81 billion, according to the Climate Bonds Initiative. Now, the broader category of socially responsible investment is set to get its own boost.
Less than a year after launching its Green Exchange (LGX) – the first ever trading platform for climate-friendly debt – in September 2016, the Luxembourg Stock Exchange is opening up a window on the LGX for sustainable and social projects.
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| Robert Scharfe, LGX |
The ‘S&S’ window will have the same features as the LGX. Issuers will be required to post additional disclosures on planned use of proceeds, provide an ex-ante external review and commit to regular post-issuance reporting. LuxSE provides all the documents free and uses the Ethereum blockchain-based platform to ensure transparency, CEO Robert Scharfe tells Euromoney.
Scharfe says there was a push from both investors and issuers to broaden the exchange’s offering. Indeed, some bankers have told Euromoney that they expect the social and sustainability bond market to eclipse green bonds.