EIB: The climate and environmental bank of the European Union
The EIB is one of the world's main financiers of climate and environmental action and the first Multilateral Development Bank to align its new operations with the goals and principles of the Paris Agreement. It aims to dedicate more than 50% of new annual financing to green investment by 2025 and has committed to tracking such investment in line with the framework established by the EU Taxonomy Regulation.
A pioneer in sustainability funding, EIB launched the world’s first green bond
in 2007 and has since issued EUR 39 billion worth of Climate Awareness Bonds (CABs) focusing on climate change mitigation. The EIB recently published an independent report evaluating CABs and EIB’s role in the green bond market between 2007 and 2020. Since 2018, the EIB has also raised EUR 6.5 billion worth of Sustainability Awareness Bonds (SABs), whose focus is on other areas of environmental and social sustainability. The Bank has already aligned the documentation of its CABs and SABs with the EU Taxonomy Regulation and plans to progressively align these instruments with the expected EU Green Bond Standard.
“Efficient involvement of international capital markets in the financing of sustainable development requires a strategic alliance among key market players. The EIB and LuxSE are close partners in the development of clarity in sustainability, which is essential for true impact investment. The favourable reception of our 10-year USD Global CAB, the 1,000th bond on LGX, endorses this joint endeavour with the support of the global investor community,” commented Ricardo Mourinho Félix, Vice-President for Funding and Treasury at EIB.
Exponential growth of LGX reflects market development
LuxSE established LGX in 2016 to unlock sustainable capital and facilitate sustainable investment. The platform has seen exponential growth since then, highlighting the increasingly important role of sustainability in international capital markets.
What started as a platform for green bonds in 2016 has grown in both size and product range, responding to the increasing need for transparency, accountability, reliability and comparability of sustainable securities displayed on LGX. LGX now encompasses all categories of bonds with a focus on sustainability, with mandatory requirements for transparency and reporting.
“This 1,000th sustainable bond displayed on LGX illustrates the role that Luxembourg’s sustainable finance ecosystem is playing globally in raising the public and private capital needed to achieve the objectives of the Paris Accord on Climate Change and the Sustainable Development Goals. It also underlines the innovative cooperation between the European Investment Bank and the Luxembourg Stock Exchange, which has helped shape the direction of sustainable finance for more than a decade now, as it did when issuing the world’s first green bond in Luxembourg in 2007,” commented Luxembourg Minister of Finance Pierre Gramegna.
Towards harmonised standards