ESG funds

Give your ESG funds exposure to a wide range of investors by joining the Luxembourg Green Exchange (LGX).

The Luxembourg Green Exchange – A unique platform for ESG funds

LGX is a reference platform offering quality and transparency, with access to a large source of information across different sustainable financial instruments. Being visible on one of the world’s leading reference platforms brings increased transparency and visibility for investors and issuers alike. It is easier to find reliable, relevant information in one central place. This improves comparability of products.  The investors use the LGX platform on a daily basis to access information. Higher visibility also brings the opportunity of diversifying the investor base.

All ESG funds displayed on LGX

 

What makes a fund an ESG fund ? 

A fund must screen 100% of its invested portfolio in line with its ESG policy and strategy. 30% of total assets may be invested in the form of cash or short-term cash equivalents.

  • The ESG strategy may combine a number of the following strategies:

    • Norms-based screening – approach based upon screening in accordance with recognised frameworks, such as the UN Global Compact or Human Rights;
    • Multiple exclusions strategy – approach that excludes multiple investments or classes of investments from the investible universe;
    • Best-in-class – approach where leading or best performing investments within a universe, category or class are selected or weighted based on ESG criteria;
    • ESG integration – approach which analyses the ESG performance of companies and considers this in the investment process;
    • Engagement – active ownership through engagement with companies on ESG matters;
    • Voting – active ownership through voting on ESG matters;
    • ESG ethical screening – approach based on a strategy dedicated to screening in accordance with specific frameworks or values such as ESG shariah or faith-based screening;
    • Investing for impact – approach where specific impact objectives are targeted, measured and reported.


    A fund must apply an exclusion policy. It should be noted that a single exclusion strategy or engagement and voting strategy alone are not considered sufficient to qualify as an ESG fund. Additionally, where local legal requirements already exclude investment in certain sectors (e.g. anti-personnel munitions and cluster bombs), this is not considered as an exclusion per se as it applies to all funds irrespective of whether the fund is pursuing an ESG strategy or not.

    A fund must demonstrate how it integrates its ESG strategy and criteria into the investment process. The investment process must address ESG research process, construction of the investable universe, investment decision process, ongoing portfolio monitoring and divestment.

    A fund may, as an alternative to fulfilling the above mentioned criteria, be awarded a reputable ESG fund label. Acceptable ESG fund labels currently include LuxFlag ESG label, the FNG Siegel (stars 1, 2 or 3), the French label ISR, and the Nordic Swan Ecolabel.

Fund labels

Funds labelled by a labelling agency benefit from added credibility, transparency and superior quality standards. Funds which have been awarded labels recognised by LGX will automatically meet the portfolio screening criteria and will benefit from a fast-track procedure.

ESG fund labels recognised by LGX

 

Asset managers with ESG funds on LGX

A success story from one of our asset managers

"We are proud to make the step of registering our funds on LGX, which again recognises our long-term commitment to SRI. I would also like to emphasise that ESG integration infuses all NN IP’s asset classes, and we continue to develop and expose our investment strategy to the next frontiers of sustainability."

Adrie Heinsbroek

Head of Responsible Investment, NN Investment Partners

The Luxembourg Green Exchange in a nutshell

The market for sustainable finance investments has experienced rapid growth in recent years as attention turns to working towards the Sustainable Development Goals and meeting the targets under the Paris Climate Agreement.

To help facilitate the development of this market, in 2016 we launched the Luxembourg Green Exchange (LGX), a dedicated platform for sustainable securities.

LGX aims to bring investors and issuers of sustainable financial instruments together on a single platform. To find out if your securities are eligible to join LGX, visit our How to join section. 

If you need more information

Contact us

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Jane Wilkinson

Head of Sustainable Finance

+352 47 79 36 319 wij@bourse.lu
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Benoit Pauly

Sustainable Finance Officer

+352 47 79 36 402 bpa@bourse.lu