FAQ - LGX Bonds (Luxembourg Green Exchange)

The Luxembourg Green Exchange (LGX) is a platform dedicated to sustainable financial instruments, which include bonds, funds and other financial instruments.

These Frequently Asked Questions (FAQ) address specific issues around the registration of bonds. A separate FAQ document dedicated to funds is also available on our website: www.bourse.lu/faq-lgx-funds).
  • LGX is a unique platform entirely dedicated to green, social and sustainable financial instruments launched by the Luxembourg Stock Exchange (LuxSE) in September 2016.

    The platform offers an environment where issuers of green, social and sustainable securities can market their instruments and publish information relating to the use of proceeds, both at the start and during the lifetime of a security. At the same time, the platform caters to responsible investors by providing full and unrestricted access to a list of securities that are 100% green, social or sustainable, together with their respective security-specific information.

  • LGX is the first platform that makes industry best practices for green, social and sustainable securities a mandatory requirement. It is also the only exchange that requires issuers to commit to post-issuance reporting once a security has been registered or listed. Within the industry’s best practices, LGX recognises in particular ICMA’s Green Bond Principles (GBP), the Climate Bonds Initiative’s (CBI) Climate Bonds Standard (for green bonds), the ICMA’s Social Bond Principles (SBP) and the ICMA's Sustainability Bond Guidelines (SBG).

  • Demand for green investments is growing rapidly. But the risk of greenwashing threatens the integrity of the green market. As the market evolves, there is a growing need for greater transparency. The same applies to social and sustainable instruments.

    With the creation of LGX, LuxSE aims to provide green, social and sustainable issuers and investors with a dedicated infrastructure where they can post and access information relating to security use of proceeds and impact in a transparent and efficient way, thus boosting investor trust and integrity in the market.

    The opening of the green bond window in September 2016 has been a trailblazer for our platform. As the international framework governing green, social and sustainability bonds is nearly identical (with the obvious exception of the specific taxonomies) it was a natural step for LGX to extend green bonds eligibility criteria to social bonds and to sustainability bonds.

    To be eligible, the issuer will have to declare (similarly to green bonds) the social or sustainable nature of the financed project(s) in line with the ICMA’s Social Bond Principles (SBP) and the Sustainability Bond Guidelines (SBG). As with green bonds, there is a need for the issuer to provide an external review and a commitment to conduct post-issuance reporting on the way the proceeds are used. Similarly, issuers are also encouraged to make their KPIs/metrics known and report against these with special attention to anticipating the social/sustainable additionality of the projects behind the financial instrument.

    Today, most responsible investors still do not differentiate their sustainable investments. Yet, as the market matures and knowledge improves, investors might want to assess financial instruments more specifically around product features. The opening of our social window and sustainable window is our bet on the future scale and diversification of the sustainable finance market.

  • Issuers joining LGX will benefit from a dedicated environment where they can fulfil their reporting duties in line with internationally recognised best practices. It also allows issuers to choose from a variety of different disclosure methods.

    LGX acts as a transparency platform for green, social and sustainable information. Strict adherence to its rules and widely-accepted green and social principles reduces the risk of greenwashing, ensuring that only issuers that commit to entry requirements and provide full transparency on their projects can be displayed on LGX.

    LGX also acts as a platform that brings green, social and sustainable investors and issuers together. Having securities admitted to LGX offers issuers the opportunity to raise awareness about their sustainable-oriented projects via enhanced transparency.

    Lastly, issuers will get commercial value for their additional disclosure efforts via the free display of their sustainable documentation on our platform.

  • Potential investors looking to invest in green, social or sustainable securities and who value transparency will benefit from this platform. They will have free and unrestricted access to information available relating to a security displayed on LGX (e.g. frameworks, second opinions, certifications, rating reports, use of proceeds reports, project information, etc.), allowing granular due diligence of the security.

    The above translates into lower research, analysis and comparison costs for investors.

  • To join LGX, a bond must be listed on one of LuxSE’s markets (i.e. the EU-regulated Luxembourg Market (BdL) or the exchange-regulated Euro MTF market), or registered on the Securities Official List (SOL).

    Once the security is registered or listed, an issuer will have to apply for its security to be admitted to LGX. In the application form, the issuer needs to ensure that the net proceeds raised via the bond will be entirely dedicated to green, social or sustainable projects (in line with national or international taxonomies as mentioned on our website), commit to provide both an independent external review and ongoing post-issuance reporting.

    For more details on how to display bonds on LGX, visit our dedicated page.

  • As for green bonds, the social and sustainable windows is for issuers that value transparency addressed to SRI investors. The social and sustainable windows are the perfect information tool to inform the market that an instrument is aligned with the ICMA’s Social Bond Principles (SBP) or the Sustainability Bond Guidelines (SBG). Alignment with the ICMA’s SBP or SBG is a sine qua non condition of being admitted to LGX.

  • To be accepted to the social and sustainable windows of LGX, a similar process as for green bonds applies: once a social or sustainability bond is listed on one of LuxSE’s markets, or registered on SOL, an issuer can apply for LGX display. The issuers 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.

  • LuxSE recognises several broad eligibility categories depending on the nature of the bond:

    The entirety of the net funds raised via the Security will be invested in the financing or refinancing of green projects as defined by the Green Bond Principles and/or the Climate Bonds Initiative’s eligibility taxonomy.

    This includes several broad categories of eligibility for green projects defined by the GBP's, including:

    • Renewable energy
    • Energy efficiency
    • Pollution prevention and control
    • Environmentally sustainable management of living natural resources and land
    • Terrestrial and aquatic biodiversity conservation
    • Clean transportation
    • Sustainable water and wastewater management
    • Climate change adaptation
    • Eco-efficient and/or circular economy adapted products, production technologies and processes
    • Green buildings which meet regional, national or internationally recognised standards or certifications.

    The entirety of the net funds raised via the Security will be invested in the financing or refinancing of social projects as defined by the ICMA’s Social Bond Principles.

    This includes several broad categories of eligibility for social projects:
    • Affordable basic infrastructure
    • Access to essential services
    • Affordable housing
    • Employment generation including through the potential effect of SME financing and microfinance
    • Food security
    • Socioeconomic advancement and empowerment

    Additionally the social projects should define the target population, examples of which may
    be those:
    • Living below the poverty line
    • Excluded and/or marginalized populations/communities
    • Vulnerable groups
    • People with disabilities
    • Migrants and/or displaced persons
    • Undereducated persons
    • Unemployed

    The entirety of the net funds raised via the security will be invested in the financing or refinancing of a blend of green and social projects as outlined above under green and social bonds sections as defined by the ICMA’s Sustainability Bond Guidelines (SBG).


    This includes several broad categories of eligibility for green projects including:

    • Energy saving
    • Pullution prevention and control
    • Resource conservation and recycling
    • Clean transportation
    • Clean energy
    • Ecological protection and climate change adaption

  • We take into consideration the security itself. We do not exclude issuers based on their line of business (with the exception of specific circumstances – refer to question 12 below). We do, however, do a thorough check if the green/social/sustainable instrument to be displayed on LGX will allocate proceeds to a green/social/sustainable projects.

    It is not the LuxSE’s role to decide whether to exclude ‘brown companies’ from issuing green/ social/sustainability bonds as we would be precluding the transition to a more sustainable economy. “Brown” companies must start somewhere. The investment decision lies with the investor who will make their own informed decision based upon the information available at time of investment. This is however why we consider maximum transparency as a key point for the development of this market.

  • Any type of issuer may apply to join LGX provided they meet LGX entry requirements. Certain investment/project categories may be excluded (refer to question 12 below).

  • Entry to LGX is at the discretion of LuxSE’s LGX Team who will review use of proceeds and pre-issuance external reviews against the entry requirements before deciding whether a green, social or sustainable security can be displayed on LGX. The LGX Team is responsible for checking the appropriateness of disclosure and transparency of a security, but will not define the quality of the underlying investments.

    If a security does not meet the entry requirements for LGX, it can still list on one of LuxSE’s markets, without additional LGX display.

  • Once a security is displayed on LGX, LuxSE will conduct an annual review to ensure the issuer complies with its commitment to disclosure and transparency.

    LGX does not impose any standards or rules on documentation for post-issuance reporting, but LuxSE reserves the right to withdraw a security from LGX if it does not abide by LGX requirements.

  • No. LGX is not a new market. It is a dedicated platform for securities that are listed on one of LuxSE’s markets or registered on the Securities Official List (SOL). In other words, LGX will complement, not substitute, LuxSE’s two existing markets and SOL.

  • Since the launch of LGX, there’s been a push, from both investors and issuers, to expand the green bond market into the broader sustainability area. Achieving environmental and social objectives is not mutually exclusive. Both can contribute to the paradigm shift of having more private capital allocated to social good projects and more and more investors have embraced this holistic mindset.

    LGX’s expansion is a direct response to what the market needs and expects. The solution we proposed for green bonds around enhanced transparency worked well and can now be successfully replicated to the social and sustainable universe to promote growth and diversification of this market.

  • The global value of SRI products and strategies amounts to more than $23 trillion . Due to the flexibility offered by sustainability bonds allowing for a much broader range of projects than just green, they are likely to produce a larger market. It is therefore likely that they will attract more corporates to issuing such instruments.

  • We are generally targeting SRI investors, as for green bonds. These want diversity in their SRI (sustainable and responsible investing) portfolios, both for risk management & diversification reasons and/or for personal sensitivity to one or the other area of SRI.