Lexology GTDT - Government, NGO and Supranational support
In this section:
Government support
Are there any governmental actors in your jurisdiction that are specifically dedicated to promoting and supporting socially and environmentally responsible investment practices, as well as purpose-driven companies? What purposes do they pursue and how do they do so?
Several initiatives from public actors are dedicated to promoting socially and environmentally responsible investment practices in the Luxembourg financial framework.
In 2015, the government created the Climate Finance Task Force, with the objective of developing initiatives related to sustainable finance to consolidate Luxembourg’s position as a green finance hub.
In 2018, the government adopted the Luxembourg Sustainable Finance Roadmap to promote sustainable finance in Luxembourg with concrete objectives. One of the recommendations of the roadmap was to create the Luxembourg Sustainable Finance Initiative, which was launched in 2020 and is co-chaired by the Ministry of Finance and the Ministry of Environment, Climate and Sustainable Development.
In 2018, the International Climate Finance Accelerator (IFCA) was created in the form a public–private partnership. The aim of the IFCA is to support innovation and high-impact investment strategy by accelerating climate funds managers.
This involves financial and non-financial support (eg, training, workshop and networking).
Finally, together with the European Investment Bank, the government created the Luxembourg-EIB Climate Finance Platform to mobilise and support investment in international climate finance, focusing on climate change mitigation and adaptation.
Law stated - 05 October 2021
NGO support
Are there any non-governmental organisations (NGOs) operating in your jurisdiction that are specifically dedicated to promoting and supporting socially and environmentally responsible investment practices, as well as purpose-driven companies? What purposes do they pursue and how do they do so?
LuxFLAG is a major actor in the promotion and support of responsible investment. It is an independent non-profit association that aims to award recognisable labels to investment funds or companies. The different labels delivered by LuxFLAG are microfinance, environment, ESG, climate finance and green bonds. At the end of 2020, a total of 303 investment products had been granted a LuxFLAG label.
Inspiring More Sustainability (IMS) is the national representation for CSR Europe, the European leader for corporate social responsibility, in Luxembourg. IMS is focused on raising awareness and providing information about corporate social responsibility and sustainability, and proposes toolkits, best practices and training to Luxembourg actors on those matters.
In addition, associations such as the Luxembourg Bankers Association, which has an ESG risk task force, and the Association of the Luxembourg Fund Industry (ALFI) dedicate part of their activities to reporting, analysing and recommending the implementation of sustainable finance in Luxembourg. For instance, the ALFI issued, together with Morningstar and ZEB, the ‘European sustainable investment funds study 2021: Catalysts for a greener Europe’.
Law stated - 05 October 2021
Supranational support
Are there any supranational actors operating in your jurisdiction that are specifically dedicated to promoting and supporting socially and environmentally responsible investment practices, as well as purpose-driven companies? What purposes do they pursue and how do they do so?
Supranational actors acting in Luxembourg mostly come from European and international initiatives. For instance, the non-profit network esela aims to promote a better understanding of the law in impact investing, business and human rights or the response of businesses to the climate to financial actors wishing to focus on impact investment.
The European Venture Philanthropy Association also plays a key role in the impact investment landscape in Luxembourg. Its aim is to reinforce the organisation of investees with a societal purpose and provide them with financial (by ensuring capital flows into impact investing sectors) and non-financial (eg, research, data, tools on venture philanthropy and investing for impact and access to a free network) support.
Luxembourg financial actors may also benefit from the European Microfinance Platform, which aims to grant access to financial services that are affordable, sustainable and inclusive in the microfinance sector.
B Lab, a global non-profit organisation, delivers B Corporation certification of social and environmental performance to for-profit companies established in Luxembourg. More than a branding tool, the B Corporation certification allows investors and consumers to rely on the effort made by B corporations to maintain their environmental and social impact.
Law stated - 05 October 2021
