In the past couple of years, we’ve heard these words repeatedly: “sustainable finance is growing”, “it is the new normal”, or “incredible growth in ESG products”.
The European regulations have had the positive effect of putting sustainable finance at the centre of financial professionals’ conversations. The discussions usually revolve around the challenges of implementing the regulations (legal interpretation, lack of data, comparability issues, costs implied, liability concerns, etc.) while acknowledging an upward trend in the development and sale of sustainable financial products.
Fair enough. However, let’s be aware that we are not in for a sprint, but rather for a long-distance, cross-country run: sustainable finance is not only about implementing disclosure requirements while managing costs and reputational risks. It is neither about repackaging existing financial products based on SFDR’s classification.
Sustainable finance is about having a broad and transparent view of finance. In other words, sustainable finance is about considering the role of finance in shaping our economies, and hence its impact on people and their environment.
We should then ask ourselves: what do we want for our company, for Luxembourg as a whole?
We could take the easy route, putting a quick layer of green paint all over, pretending everything has changed; or,
we could opt for the meaningful route: go through a real transformative journey to make Luxembourg a credible, transparent, leading sustainable finance centre, with a tangible, measurable positive impact on the world.
Which route would inspire you the most?
Personally, I believe in certain corny phrases such as “we are all part of the solution”. Not just because of how we behave in our private lives (the so-called “little steps”, such as avoiding using our cars or taking the plane, eating less meat, buying locally, etc.), but because of the decisions we take every day at work. As financial professionals, our power is immense to transform our financial system. We have the incredible opportunity to give a meaning to our everyday job. Let’s seize it!
To conclude this letter, a brief look back on 2021 and some insight on our plans in 2022:
2021 has been the kick-off year of the LSFI, with the launch of the Luxembourg Sustainable Finance Strategy and LSFI’s first hands-on activities: technical webinars, awareness-raising sessions, climate scenario analysis, development of a Take Action section… (for a full overview of our 2021 activities, our 2021 annual report will be released in February 2022, stay tuned!)
Next year, our main objective will be to consolidate and enrich these first initiatives (i.a., creation of working groups on climate analysis, development of the Take Action section with trainings and regulations, launch of a Luxembourg wide study, etc.), keeping in mind our motto: offering serious and pragmatic support to the financial sector to help its transition towards more sustainability, wherever possible.
The LSFI is very thankful to the highly skilled and deeply committed financial professionals, academics, civil society representatives and civil servants that have been gathering around us and supporting our work over the past year.
We hope this Sustainable Finance community will continue to grow and are really looking forward to working with you all in 2022!
Enjoy the festive season, and we wish you an excellent and sustainable new year!
LSFI’s team wishes for 2022
“My wish for 2022 is that impactful sustainable finance continues to thrive, that sustainability evolves into an attitude and a mindset paradigm across financial actors so that they become the key engine for the shift needed across the real economy.”
LSFI Sustainability Adviser
“My wish for 2022 is that sustainable finance becomes an accessible topic for all sectors of society, going beyond the confines of the financial sector and putting people at the centre of the equation.”
Maria Tapia Rojo
LSFI Communication Manager
“My wish for 2022 is that the road towards a more sustainable finance could be undertaken by more and more organizations, through an agreed Taxonomy, an adequate disclosure, clear standards and cooperation.”
LSFI Communication / Sustainability Intern