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Luxembourg Sustainable Finance Initiative (LSFI): You have been part of the LSFI since the beginning of its activities, first as a sustainability adviser and then as interim general manager. Going forward, what are your priorities as LSFI’s General Manager? 

Nicoletta Centofanti: The LSFI will consolidate its role as the coordinating entity of all the sustainable finance actors in Luxembourg and foster its mission of raising awareness and supporting the financial sector in its transition towards increased sustainability.
As per our mission and action plan, we will provide easily accessible information and tools to help better understand the complexity of this critical matter, implement sustainable strategies and advance sustainable investments.

The LSFI has to be identified by all actors in the space as a central point of information and as the stakeholders’ coordinator. We aim to facilitate the adoption of solutions that help address the challenges in the sustainable finance domain but also encourage best practices to grasp opportunities and continue improving. The ultimate goal is that sustainable finance and impact investing become mainstream.

(LSFI): In your opinion, what is the main added value of the LSFI?

(NC) The LSFI has the very relevant role of being an enabler and a facilitator. Such function is indispensable to advancing sustainable finance, a complex, fast-evolving segment where multiple and cross-sectoral expertise is required. Being an independent, public-private, not-for-profit organization, we are in the position to coordinate all the actors active in the space and to combine their expertise and experience in order to identify synergies. We help streamline activities and priorities, which is key to achieving the much-needed transition at speed.

(LSFI): How can the LSFI, Luxembourg’s coordinating entity on sustainable finance, support the transition to the financial sector towards sustainability? 

(NC) As per our Action Plan, we work across three Pillars: Awareness and Promotion, Unlocking Potential, and Measuring Progress. Our core activities are defined within these Pillars, which are interconnected.

Awareness and promotion are fundamental aspects and the precondition to achieving the Sustainable Development Goals and the Paris Agreement objectives. In line with this, through our newsletter, social media channels and website, we keep the sector up to date on major news, trends, recent publications, upcoming events and market updates. We also showcase best practices and solutions via our technical webinars. In addition, we raise awareness in corporates and schools to ensure it becomes increasingly understood by all the public and thus requested by retail investors and savers.

By unlocking potential, we want to provide the financial sector with solid guidelines and support. We offer free toolkits to understand better and unveil some existing challenges. An example is our Take Action section, currently dedicated to gathering available Trainings and Instruments. We also coordinate Working Groups on key challenges for the financial industry to identify solutions leveraging the different sectors expertise. We also foster dialogue and collaboration with and among our stakeholders to identify common objectives and solutions. Going forward, we will develop additional activities to support financial institutions to address the encountered challenges and enhance their knowledge on less mature themes, such as impact measures, biodiversity/nature, human rights and gender finance.

Through measuring progress, we help the sector assess the advancement made in this space and identify a framework to monitor it over time. The Climate Scenario Analysis we coordinated in 2021 and the Luxembourg Sustainable Finance Study, published last December, are two examples. Measuring is a fundamental step to understand where we are and, therefore, where we should go next, it is also necessary in order to identify gaps and areas of improvement.

(LSFI): Considering the LSFI’s activities over the last two years, what are the main opportunities and challenges you have observed in the Luxembourg sustainable finance ecosystem? 

(NC) Being Luxembourg a small country with a significant role globally, it has theunique privilege to continue being a pioneer while piloting solutions that do not exist yet. Luxembourg has a rich ecosystem with multiple actors across from different sectors that have extensive knowledge and expertise. The challenge, as well as the opportunity, is to bring all these actors to work together for the same common goal. I believe that FinTech and research sectors can be central in helping the financial industry overcome the challenges associated with data, standardization and impact measurement. In parallel, education has to be constantly developed and updated to nurture the young generation and professionals across all seniorities and areas of expertise. Additionally, the inclusive finance sector can share its expertise on investments in SMEs and developing countries and its experience in assessing and measuring social dimensions. Finally, the technical extensive Luxembourg expertise in blended finance, sustainability securities and sustainable investments labels developed in the country in the past years can be further enhanced and exported worldwide.

As Luxembourg coordinating entity in Sustainable Finance, we will continue fostering dialogue and collaboration among these actors in order to address the existing challenges by promoting best practices and supporting the financial sector with tools and solutions. I am looking forward to working with all our stakeholders and collectively achieving such an important mission.