Mobilising Capital for a Sustainable Future
Mobilising capital for a better world requires a collective global effort—from governments and businesses to individuals.
Failing to embed sustainability into business practices is no longer just a missed opportunity—it’s a direct risk to economic stability and long-term viability. Climate-related disruptions can fracture supply chains, weaken infrastructure, and send shockwaves through financial markets.
But the risks don’t stop with the environment.
Social challenges—rising inequality, health disparities, food and water insecurity, and forced migration—are accelerating, putting pressure on public services and testing the resilience of communities. These dynamics aren’t isolated; they ripple into the economy, affecting workforce reliability, consumer demand, and social cohesion.
Meanwhile, the governance landscape is shifting fast. Companies that ignore evolving regulatory standards or stakeholder demands for transparency and accountability are finding themselves exposed—not just to reputational harm, but to legal challenges and capital flight. Trust, once lost, is hard to rebuild.
In today’s interconnected world, sustainability isn’t just about doing the right thing. It’s about making the smart, strategic choice for the future. Finance plays a pivotal role in enabling this transformation. As a global financial hub, Luxembourg has made sustainable finance a strategic priority, leveraging its expertise and platforms to act as a multiplier and move capital to where it is needed the most.
Luxembourg Sustainable Finance Strategy
Looking towards 2030, and building on the Ministry of Finance’s 10-Point Sustainable Finance Action Plan as well as the LSFI 2030 strategy, Luxembourg aims to:
1.
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.
2.
Enhance collaboration with the financial sector to mobilise private capital, while mainstreaming sustainable finance and improving the “toolbox” for sustainable investments.
3.
Promote international transparency and trustworthiness of sustainable and impact investments for investors via Luxembourg’s pioneering role in fund labelling and sustainable securities listing.
4.
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.
Curious to learn more?
If you're looking to deepen your understanding of sustainable finance trends in Luxembourg and across Europe, we highly recommend consulting the following reports:
- The Sustainable Finance in Luxembourg 2024 study, conducted by the LSFI and PwC, examines the core ESG strategies adopted by funds based in Luxembourg, focusing on their evolution in terms of the number of funds and their AuM and delving into the ESG strategies employed. The study also offers other key updates, including PAI reporting, the use of the voluntary European ESG Template (EET), climate-related affiliations embraced by Luxembourg market participants as well as an overview of the key sustainable finance players in Luxembourg.
- Complementing this, the European Sustainable Investment Funds Study 2024 highlights Luxembourg’s and Europe’s leadership in the field, with the Grand Duchy alone hosting over a third of the region’s sustainable fund assets.
- In addition, Luxembourg for Finance publishes an annual report in collaboration with New Financial, alternating each year between a focus on ESG and green finance, offering further valuable insights into the development of sustainable finance both locally and globally.
Luxembourg Sustainable Finance Initiative
To implement and support this agenda, the LSFI serves as the central coordinating body, acting as a knowledge hub and centre of excellence. Its mission is to build expertise and leadership, mobilise the financial sector, and monitor and communicate progress.
The LSFI has also put in place the Impact Investing Advisory Board (IIAB) and the Scientific Advisory Board (SAB) to further reinforce Luxembourg’s leadership in sustainable finance. The IIAB brings together experienced professionals in impact investing to facilitate thematic knowledge exchange and support the growth of a vibrant impact investing ecosystem. The SAB complements these efforts by grounding sustainable finance in robust scientific analysis. It conducts assessments on critical environmental and social topics, provides science-based recommendations for integrating sustainability into financial institutions, and develops practical tools and benchmarks to support investment decisions.
Together with a comprehensive resource hub—which offers access to key frameworks, regulations, training, and data platforms—the LSFI supports the evolution of Luxembourg’s ecosystem into a mature and forward-looking hub for sustainable finance.
Technology as a Catalyst for Sustainable Finance
Luxembourg aims to lead in sustainable finance by harnessing cutting-edge technologies that enhance transparency, accountability, and innovation.
At the core of this vision is the strategic use of Distributed Ledger Technology (DLT), Artificial Intelligence (AI), and advanced data analytics. These tools enable a secure, data-driven ecosystem where sustainable investments are transparent and accountable.
DLT: Enhancing Trust Through Transparency
DLT offers a tamper-proof mechanism for verifying sustainability metrics and tracking the deployment of green capital. Its real-time insights foster greater trust throughout the financial value chain. With a clear ambition to scale DLT by 2030, Luxembourg reinforces its commitment to transparent, goal-aligned finance.
AI-Driven ESG Insights
AI enhances the quality of ESG data by enabling more precise measurement of emissions, energy use, and resource efficiency. This leads to better-informed decision-making and stronger alignment with sustainability targets.
Smart Data Frameworks for Systemic Impact
Luxembourg is advancing interoperable data-sharing frameworks that facilitate seamless collaboration among financial actors. This boosts the scalability of green initiatives in sectors such as renewables, resilient infrastructure, and social impact.
