Introduction to GSSS Bonds and Market Growth
GSSS bonds—an acronym for Green, Social, Sustainability, and Sustainability-linked bonds—have emerged as essential tools in the transition toward more sustainable and inclusive economies.
The GSSS bond market has experienced remarkable growth since the inception of the market in 2007. These instruments enable governments, companies, and institutions to access deep pools of capital from global investors while funding long-term projects and linking financing to measurable sustainability outcomes. By combining transparency, accountability, and scale, GSSS bonds serve as a powerful mechanism to bridge the financing gap in the global sustainability transition.
There are several types of bonds, each with distinct objectives:
- Green Bonds fund projects related to renewable energy, energy efficiency, clean transportation, and other environmentally beneficial activities.
- Social Bonds support initiatives such as affordable housing, education, and healthcare.
- Sustainability Bonds combine both green and social objectives.
- Sustainability-linked Bonds (SLBs) are performance-based instruments in which the bond’s financial characteristics are tied to the issuer’s sustainability performance targets.
The Luxembourg Green Exchange: The World’s First Platform for Sustainable Securities
Launched by the Luxembourg Stock Exchange (LuxSE) in 2016 to directly contribute to the objectives of the United Nations Sustainable Development Goals and Paris Agreement, LGX is the world’s first and leading platform dedicated exclusively to sustainable finance.
What started out as a platform dedicated solely to green bonds in 2016, LGX has now expanded to welcome a wide variety of issuers and securities onto its platform.
From green, social and sustainability (GSS) bonds to sustainability-linked bonds and sustainable investment funds (funds classified as Article 8 or Article 9 funds under SFDR), the Exchange is constantly evolving to address sustainable finance market developments and unlock the vast amount of capital that we need to reach our global goals.
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LGX includes a full suite of sustainability-orientated products and services:
Navigate sustainable finance with clarity through the LGX Platform – gain access to sustainable securities and documentation, guided by rigorous, best-practice-based requirements that set a global benchmark.
Discover sustainable finance your way with the LGX Academy – from hands-on courses to bespoke training, LGX programmes empower every learner, beyond theory.
Unlock sustainable investment opportunities with the LGX DataHub, offering structured, in-depth data on nearly all sustainable bonds listed worldwide.
Advance your impact with LGX Assistance Services, guiding issuers globally with expert support across the full lifecycle of sustainable bond issuance and reporting.
“LuxSE is the biggest stock exchange for international bonds in Europe, and a very innovative one. The recent implementation of the Green Exchange is a proof of an open-minded approach towards the needs of financial markets. On top of that, we received strong recommendations from market participants to list there.”
— Piotr Nowak Poland’s Former Deputy Minister of Finance
Achieving Gender Equality and Empowering Women and Girls
The United Nations Sustainable Development Goal (SDG) 5 seeks to achieve gender equality and empower all women and girls. In alignment with this goal, the Luxembourg Green Exchange (LGX) introduced a dedicated gender-focused bond flag in May 2022 to highlight sustainable securities that finance projects advancing gender equality. These flagged bonds may not all be classified as 100% "Gender Bonds" under the UN Women, IFC, and ICMA’s 2021 guidance, but all gender-focused bonds earmark part of their proceeds or set specific KPIs toward gender-related outcomes. Crucially, they also include post-issuance reporting that documents the issuer’s tangible actions toward SDG 5 objectives, thereby enhancing transparency and accountability in gender-focused financing.
Sustainability Standards, Criteria and Regulation
Sustainability standards, guidelines, and catalogues play a crucial role in guiding sustainable bond issuance worldwide. While these standards are typically voluntary, they significantly contribute to maintaining the credibility and transparency of the sustainable finance market as well as the instruments issued within it. The specific standard chosen for any new bond issuance depends on factors such as the type of bond, the market of issuance, and related regulatory frameworks.
To be displayed on LGX, bonds must comply with at least one recognised sustainability standard, guideline, or catalogue and meet LGX’s additional eligibility requirements. For a fund to qualify for display, it must adhere to the Sustainable Finance Disclosure Regulation (SFDR) and be designated as either an Article 8 or Article 9 fund by its asset manager. For more information, consult the LGX website.
Unique Data-Based Market Insights
Covering granular sustainable bond data on more than 20,000 sustainable bonds listed worldwide, the LGX DataHub serves as a source of information on trends and developments in the field of global sustainable debt issuance. Many market studies, including several produced by the Organisation for Economic Co-operation and Development (OECD), are powered by data from the LGX DataHub.
LuxSE has also published its own market studies based on data from the LGX DataHub, covering topics such as the state of the gender-focused bond market, a snapshot of the global GSSS bond issuance market 2024 and the evolution of Sustainability-linked bonds.
CASE STUDY EIB and Luxembourg Stock Exchange mark €100 Billion Milestone in Sustainable Finance
In August 2024, the European Investment Bank (EIB) reached a landmark €100 billion in cumulative issuance of Climate Awareness Bonds (CAB) and Sustainability Awareness Bonds (SAB). This milestone underlines the EIB’s leadership in green and sustainable finance since it launched the world’s first green bond in 2007. The achievement was marked at the Luxembourg Stock Exchange (LuxSE), a global hub for sustainable bond listings, showcasing the shared efforts of both institutions in shaping global sustainable finance standards.
The collaboration between EIB and LuxSE has had a significant impact on the development of the sustainable finance ecosystem.
Like LuxSE, the EIB has expanded its scope over the years. Initially focused on climate-related objectives, its financial instruments now support projects with social and broader sustainability outcomes. Issued in 23 currencies, the EIB’s sustainable bonds cater to diverse global investors, making it the world’s largest multilateral issuer of green bonds with dedicated use of proceeds.
