Speaking at the ILA Directors’ Day conference on 17 November 2022, CSSF (Financial Sector Surveillance Commission) director general, Claude Marx, addressed the topic of greenwashing in the Luxembourg financial sector.
“Under SFDR, a delegated act with 13 regulatory technical standards covering hundreds of requirements will be going live on 1 January 2023. I think it will be a challenge to be up to speed,” he said. This is the current wave of regulation, with more in the pipeline for the coming years, he noted. “Yet there is an expectation by the CSSF that all this should be properly implemented”.
On the topic of how banks and advisors must talk to clients about green products, he mentioned the importance of MiFID rules which came into force in August 2022. “This is a very important milestone as it forces financial services providers to enquire about their clients’ appetites for green products,” he said. “Training must happen for all client-facing staff,” and added, “it is important that boards of directors ensure this is happening.”
He also spoke about market pressure to embrace green finance. “There is no choice but to embrace green finance. If you fail to do that you will lose customers,” he said. “Ultimately you will also have issues to attract staff. Reputational risk must be taken very seriously”.
These remarks were part of an hour-long discussion with Mr Marx, conducted at the main annual conference of Luxembourg’s directors’ institute ILA, held at the European Conference Centre Luxembourg in Kirchberg.
He also spoke to the director community about the need for strong levels of business best practice in a number of fields. The risk of global events for financial stability, digital finance regulation, crypto-assets, talent acquisition and diversity were also discussed.
This discussion brought to a close an afternoon of presentations at the Directors’ Day, which was attended by 300 ILA members. Topics ranged from considerations of technical requirements for boards of directors, through to reminders of best practice and a presentation of the meaning of “fairness” in a business context by Ludo Van Der Heyden, INSEAD Chaired Professor in Corporate Governance.
Carine Feipel, Chair of ILA said: “We had a diverse range of speakers as it is very important that Luxembourg’s directors hear many different opinions. This will help them in their task of ensuring that their organisations are well run in terms of regulatory compliance, listening to clients and stakeholders, and anticipating future challenges.”