As global demand for sustainable finance evolves, with varying degrees of commitment across regions, Luxembourg’s financial centre remains steadfast in its leadership, shaping the future of finance to align with long-term sustainability goals. Luxembourg is firmly positioned as a champion of sustainable finance, recognising it as an enduring cornerstone of economic and societal progress. Renowned for its expertise in sustainable investment and as the home of pioneering green finance initiatives, Luxembourg combines adaptability with a clear vision for the future. By mobilising capital at scale, integrating cutting-edge technologies with sustainability principles, and expanding its focus beyond traditional “green” investments, Luxembourg continues to enable transformative financial practices that support a resilient, inclusive, and sustainable global economy.
Mobilising Capital for Sustainable Growth
Our Ambitions
Expand Luxembourg’s role as a global centre for sustainable Investments, building on the country’s investment fund ecosystem and the leading role of its stock exchange.
Enhance collaboration with the financial sector to mobilise private capital, while mainstreaming sustainable finance and improving the “toolbox” for sustainable investments.
Promote international transparency and trustworthiness of sustainable and impact investments for investors via Luxembourg’s pioneering role in fund labelling and sustainable securities listing.
Develop innovative solutions for global impact by expanding on Luxembourg’s blended finance activities and accelerate the financing of the UN’s Sustainable Development Goals.
Luxembourg’s commitment to mobilising capital for sustainable growth has positioned it as a forward-thinking hub for green finance, with ambitions to drive even greater impact in the coming years. Recognised as a leader in sustainable finance, Luxembourg currently manages approximately €3.2 trillion in sustainable assets, accounting for nearly 40% of Europe’s sustainable investment funds (see Figure 7). Meanwhile, ESG private market funds demonstrate strong growth with AuM over €620 billion. This substantial base is complemented by the Luxembourg Green Exchange (LGX), a trusted platform for investors, listing over €1 trillion in green, social, and sustainability bonds. Notably, LGX has been instrumental in facilitating sovereign green bond issuances, including the world's first sovereign green bond issued by Poland in 2016 and Europe's first sovereign sustainability bond issued by Luxembourg in 2020. LGX ensures transparency and credibility for investments across renewable energy, social infrastructure, and climate resilience, making Luxembourg a reliable gateway for impactful capital.
Building on these foundations, Luxembourg seeks to deepen its role in mobilising sustainable capital through initiatives that build expertise and channel funds into high-impact sectors.
The Luxembourg Sustainable Finance Initiative (LSFI) will expand its resources and role as a centre of excellence and knowledge hub in line with its 2030 strategy. It will work in coordination with the financial sector and all its stakeholders to facilitate the development of new sustainable finance solutions, while measuring and communicating progress.
Luxembourg Sustainable Fund AuM:
LuxFLAG (Luxembourg Finance Labelling Agency) bolsters Luxembourg’s reputation by certifying financial products to the highest sustainability standards. With labelled investment and insurance products representing more than €132 billion in assets, it is the only agency in Europe that labels financial products from many different jurisdictions offering a unique range of both impact labels and sustainability transition labels.
Luxembourg’s role as a hub for blended finance solutions supports its ambition to finance transformative projects, integrating both public and private capital to maximise social and environmental impact. Partnerships with the EIB and EIF drive capital toward underserved regions, focusing on clean energy, sustainable agriculture, and infrastructure resilience.
The country’s broad spectrum of sustainable finance products ensures that investors find a range of options for socially and environmentally impactful returns, including investments in biodiversity, clean water access, and social equity. To further its appeal, Luxembourg offers targeted tax incentives and a regulatory environment that attract both private and institutional investors eager to support projects in line with EU and global climate targets.
Looking towards 2030, and building on the Ministry of Finance’s 10-point sustainable finance action plan, Luxembourg aims to expand its sustainable finance ecosystem, promoting an inclusive, transparent, and innovative environment. By pioneering products and frameworks that support transformative projects, Luxembourg will continue to mobilise capital for a sustainable future, setting a benchmark for financial centres worldwide committed to environmental and social progress.
Driving Innovation in Sustainable Finance
Our Ambitions
Accelerate sustainable finance by harnessing cutting-edge technology to drive transparency, accountability, and innovation.
Bring ESG intelligence to a higher level by fostering technology-driven solutions that address data challenges with efficiency and precision.
Develop international and strategic partnerships, leveraging both Luxembourg’s thriving Fintech community as well as its pioneering sustainable finance ecosystem.
Luxembourg is positioning itself as a global leader in sustainable finance by harnessing advanced technology to support transparency, accountability, and innovation within the sector. As the financial landscape evolves, Luxembourg is prioritising tools like DLT, AI, and advanced data analytics to help create a secure, data-driven ecosystem that ensures every euro invested in sustainable finance meets high standards of integrity and impact.
Luxembourg is positioning itself as a global leader in sustainable finance by embracing DLT as a foundational tool for future advancements. DLT offers the potential to create a secure, immutable ledger to verify sustainability metrics and track the use of green funds. With its focus on innovation, Luxembourg aims to enable financial institutions to provide investors with verifiable, real-time data on fund allocation, ensuring that capital marked as “green” is effectively deployed to sustainable projects. By scaling DLT adoption by 2030, Luxembourg seeks to establish a financial environment where sustainability claims are universally trusted and easily verifiable, supporting the EU’s ambitious environmental goals while building global investor confidence.
Similarly, Luxembourg is laying the groundwork for leveraging AI-driven sustainability analytics to transform how the financial industry measures and manages ESG metrics. AI has the potential to advance the precision of data on emissions, energy usage, and other key metrics, enabling granular assessments of sustainability performance.
Luxembourg’s ambition is to position itself as a central hub for firms requiring high-quality ESG intelligence to meet transparency demands.
To foster collaboration and innovation, Luxembourg is prioritising the development of data-sharing and interoperability frameworks. These frameworks aim to encourage cross-sector data integration, allowing diverse financial entities, ranging from traditional banks to FinTech startups, to access shared sustainability data. The goal is to enable seamless collaboration on large-scale green projects, particularly in transformative areas such as renewable energy and green infrastructure. While these tools and solutions are still emerging, Luxembourg is committed to establishing itself as Europe’s leading centre for sustainable FinTech, driving technology-driven solutions to address global sustainability challenges with efficiency and precision.
A thriving FinTech ecosystem, supported by platforms like LHoFT, which runs a dedicated Green Fintech programme, brings together startups, institutions, and regulators to drive sustainable innovation in Luxembourg. By 2030, Luxembourg envisions a fully integrated, technology-enhanced finance sector where AI, DLT, and data-sharing platforms support a financial environment grounded in transparency, accountability, and measurable impact. This forward-looking approach ensures that Luxembourg will continue to attract investors, entrepreneurs, and innovators who are dedicated to financing a better, more sustainable world.
Making an Impact Beyond Green
Our Ambitions
Leverage the expertise of Luxembourg’s financial centre to scaling social finance and impact investing.
Supporting the launch of new pilot projects for investments in new and emerging fields such as gender finance, biodiversity and transition finance.
Develop new sustainable finance products, including green securitisation, sustainability-linked loans and bonds as well as impact funds.
Through comprehensive and forward-looking strategies, Luxembourg is committed to develop innovative financing mechanisms that address both long-standing and emerging sustainability challenges.
Luxembourg has been a global leader in inclusive finance and microfinance for over 30 years. With one in three microfinance investment vehicles worldwide based in Luxembourg and the country holding the majority share of global microfinance assets under management, it has established itself as a cornerstone of the industry.
Building on this legacy, the country’s sustainable finance initiatives now also include emerging areas such as gender finance, biodiversity, the blue economy, and transition finance. To support these efforts, public-private partnerships such as the International Climate Finance Accelerator (ICFA) and the International Social Finance Accelerator (ISFA) play pivotal roles in empowering first-time fund managers to establish funds that tackle climate change and social issues through sustainable investments.
In 2024, the Luxembourg Sustainable Finance Initiative (LSFI) launched the Impact Investing Advisory Board (IIAB), an initiative designed to bring together leaders in impact investing to share knowledge and address key challenges, such as the lack of information and data sharing on market activities, performance, and practices.
Another significant focus of Luxembourg’s sustainable finance ecosystem is gender finance. This priority is reflected in the launch of the Luxembourg Women in Finance Charter and the Ministry of Finance’s 10-point action plan for gender finance, which articulates the country’s ambition to become a centre of excellence in this domain.
In Luxembourg’s vision for a sustainable financial future, ESG considerations are not viewed as a separate compliance framework but as fundamental principles embedded in financial decision-making.
Moving away from traditional ESG as a risk assessment tool, Luxembourg is championing a shift where sustainability is an intrinsic part of value creation, aligning financial performance with long-term societal and environmental benefits.
This approach involves moving beyond the mindset of "managing" ESG risks to actively driving sustainable impact. Rather than focusing on avoiding negative outcomes, Luxembourg’s financial centre encourages institutions to view sustainability as a strategic opportunity to innovate and contribute positively. By embedding sustainability into every stage of the investment process, from portfolio selection to active ownership, Luxembourg is building an investment landscape where financial growth and social impact are inherently linked. This approach empowers institutions to generate long-term returns that align with the EU’s climate and social goals, fostering a financial ecosystem that supports resilience and inclusivity.
Luxembourg’s regulatory framework encourages a broad application of sustainable finance principles, providing institutions with clear standards for integrating sustainability beyond compliance. Investors are empowered to actively seek and create value in areas like biodiversity, clean energy, social equity, and economic inclusivity, directing capital towards projects with tangible, measurable impacts. Additionally, Luxembourg’s support for innovative sustainable finance products ensures a diverse array of tools and pathways to achieve sustainability objectives.
Luxembourg’s ambition is to create a financial sector where sustainability becomes the default, reinforcing its role as a leader in sustainable finance for a future where economic gains are compatible with global sustainability objectives. By 2030, Luxembourg aims to set a new standard, fostering a financial ecosystem where positive environmental and social outcomes are embedded in every investment decision, contributing to a financial model that genuinely supports a better world.