Dear Reader,
This year was particularly challenging for sustainable finance. Yet 2025 has proven to be a decisive year, not only in moving from ambition to execution, but also in reaffirming that finance is a key element in the equation to achieve a sustainable future.
Globally, the sector faced structural and market headwinds, as the financing gap for sustainable development remained particularly large and continued to grow, particularly in developing economies. Meanwhile, uneven regulatory frameworks, changing rules, and diverging sustainability standards added complexity for investors and issuers.
Despite these challenges, stronger public-private sector engagement, the confirmation of commitments made at COP30, and technological advances, including AI-enabled ESG data analysis, have accelerated the translation of ambition into tangible action.
Capital is moving, investor expectations are rising, and sustainable finance is increasingly defined by its ability to deploy capital efficiently and at scale.
In this context, Luxembourg’s ambition to remain a leading sustainable finance hub is both timely and achievable.
To support this ambition, the LSFI’s strategy remains focused in 2026 on four key priorities: helping the sector develop expertise in emerging sustainable finance topics; coaching financial institutions in navigating complex regulatory landscapes; facilitating the growing flow of capital into sustainable investments; and exploring innovative financing instruments that bolster sustainable finance by leveraging public-private collaboration. These priorities ensure that Luxembourg’s financial ecosystem remains resilient, inclusive, and future-ready.
In line with these priorities, technological innovations, including AI, space observation, and blockchain, are increasingly confirming their role as key enablers for financial institutions.
They support improved risk analysis, enhance ESG data accessibility, and guide capital allocation, helping to overcome structural hurdles and strengthen expertise across the sector.
Similarly, the LSFI Impact Investing Advisory Board (IIAB) and the LSFI Scientific Advisory Board (SAB) will continue to support the LSFI in identifying solutions that facilitate capital flows into sustainable investments with a clear, measurable, and intentional impact and sound scientific background — directly contributing to LSFI’s focus on expanding sustainable investment opportunities and advancing public-private collaboration.
As we wrap up 2025 and look towards 2026, we will continue to lead, innovate, and mobilise capital for a sustainable future: from supporting innovative solutions to advancing impact investing, from connecting the ecosystem and bolstering synergies to fostering gender balance with the Women in Finance Founders and signatories, and from delivering masterclasses on emerging topics in sustainable finance to publishing our annual LSFI study to track sector progress in Luxembourg and beyond.
2025 also marked the LSFI’s fifth anniversary. To celebrate this milestone, we have created a short video highlighting the views of key stakeholders and the collective progress of Luxembourg’s sustainable finance ecosystem. If you haven’t seen it yet, I warmly invite you to watch it and join us in celebrating how far we’ve come — and to continue contributing to the journey ahead with us.
We look forward to building on this momentum in 2026, advancing sustainable finance together.
May the new year bring you happiness, inspiration, and many memorable moments. May the year ahead enable all of us to make decisions that align with our values and leverage finance as a vital instrument for a sustainable, inclusive, and resilient future.
With my very best wishes,
Nicoletta Centofanti
CEO, Luxembourg Sustainable Finance Initiative
