LuxFLAG Sustainable Investment Week 2022 Kicks Off in Luxembourg

The fourth edition of the LuxFLAG Sustainable Investment Week (#LSIW22) kicked off on Monday morning at Mudam - The Contemporary Art Museum of Luxembourg, with attendees also having the possibility to tune in remotely.

#LSIW22 is taking place in a hybrid format from Monday 17 to Wednesday 19 October 2022. Centred around the theme "Putting sustainability at the forefront of finance", this year's edition consists of 22 sessions spread over three days.

Denise Voss, Chairwoman of LuxFLAG, and Isabelle Delas, Chief Executive Officer (CEO) of LuxFLAG, officially opened #LSIW22 on Monday morning, with Ms Delas highlighting the crucial role to be played by sustainable finance in "solving the world's most pressing challenges".

After presenting some of the event highlights to come, Ms Delas thanked Luxembourg's Minister of Finance, Yuriko Backes, who was unable to attend in person, for her "constant support [for] LuxFLAG and the Luxembourg sustainable finance community".

In a video message recorded to mark the opening of #LSIW22, Minister Backes, who is currently on a mission abroad, congratulated LuxFLAG for "this excellent initiative which provides an opportunity to really deep dive into different facets of sustainable finance". She noted that the broad range of topics at #LSIW22 "also illustrates the evolution that sustainable finance has undergone over the past decade and more".

Looking back at the origins of LuxFLAG, Minister Backes noted that the first label issued by the Luxembourg Finance Labelling Agency (LuxFLAG), following its creation in 2006, was the microfinance label. "At the time, sustainable finance was still a niche", she elaborated, adding that the growth of this sector "is also reflected in LuxFLAG's activities": today, LuxFLAG offers six (soon seven) different labels and its scope has grown.

Luxembourg's Finance Minister noted that there had been "strong momentum" since the 2015 United Nations Climate Change Conference (COP 21) in Paris. She added that she was "convinced that the current energy crisis will further boost sustainable investment in the medium term", although she recognised the "significant setbacks" in the short term, such as the reactivation of coal plants in certain parts of Europe.

"But the crisis is also an opportunity to accelerate the transition towards net zero on two fronts", she elaborated. "First, the most effective and sustainable way to achieve energy security is by stepping up investments in renewables; secondly, in order to achieve self-sufficiency and [...] improve energy efficiency, energy conservation is gaining new momentum. Indeed, it is not enough to look for new energy sources; we also need to significantly cut energy consumption. Russia's war of aggression has reminded us all of this basic truth". Minister Backes continued: "So, despite or precisely because of the current challenging environment, there is today a window of opportunity. There is a unity of purpose to accelerate climate action".

Concluding on the subject of environmental, social and governance (ESG), specifically the "social" aspect, Luxembourg's Finance Minister stressed that "the green transition must also be a just transition". She added that the United Nations' (UN) seventeen Sustainable Development Goals (SDGs) "are all interlinked" and that, in light of increasingly frequent extreme weather events, achieveing these SDGs will be "increasingly challening but it remains critical to work towards these goals and the financial sector plays a key role". She also emphasised the need to scale up impact investments. "The public sector can act as a catalyst here and Luxembourg has certainly been a pioneer in this field", she added, citing the examples of the Luxembourg-EIB Climate Finance Platform and the future launch by the Ministry of Finance of a new vehicle with an exclusive focus on "mobilising investments to support the green transition in emerging markets".

Moreover, Minister Backes stressed the importance of increasing transparency, an area in which Luxembourg "has played the role of frontrunner [...] thanks to initiatives such as LuxFLAG and the Luxembourg Green Exchange". She also highlighted the role of the European Union (EU) in this regard, particularly in relation to regulatory initiatives such as the EU Taxonomy and disclosure obligations under SFDR: "The EU has already gone further than any other jurisdiction to address the challenge of transparency holistically". She added that it was important to "ensure that others follow suit", stressing that "dialogue between countries and regulators remains key". She concluded: "Forums such as LuxFLAG's Sustainable Investment Week play their part in not only keeping this conversation going but encouraging concrete action".

Isabelle Delas thanked both her colleague, Denise Voss, and Luxembourg's Finance Minister for their opening remarks, as well as in-person and online participants for their presence and the whole LuxFLAG team "for making all of this happen".

The opening session of #LSIW22 continued with a presentation by Frederic Vonner, Partner at PwC Luxembourg, and Dariush Yazdani, Advisory Partner at PwC Luxembourg, on "AWM industry and the ESG revolution".

Later in the day, there will be presentations on ESG investing, understanding the ESG fund's landscape, investment portfolio decarbonisation and digital solutions for sustainablity data and regulatory compliance, among others. The first day of #LSIW22 will conclude with a networking cocktail.

Further details are available at https://luxflag.org/luxflag-sustainable-investment-week-2022/.