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Daily ESG Briefing: Luxembourg Stock Exchange to launch data hub for labelled bonds

The latest developments in sustainable finance

The Luxembourg Stock Exchange will be launching a centralised data hub for a range of sustainable securities including green, social and sustainability bonds listed on LuxSE. Julie Becker, Deputy CEO of LuxSE said on a webinar hosted by Climate Bonds Initiative that the move sought to “offer investors and asset managers access to structured data with a very high level of granularity,” describing it as “a unique database in the market, which will allow them to make more informed investment decisions, but also to report”. LuxSE aims to cover all listed green, social, and sustainability bonds over time, she added.

South Pole has launched a sustainable finance practice focused on TCFD implementation, SDG mapping and climate transition. The firm, which also develops carbon offsetting projects and assesses climate risk for companies and investors, said the move was in line with its engagement with the new Taskforce on Scaling Voluntary Carbon Markets. 

Australia’s responsible investment market hit nearly A$1.2trn last year, a rise of 17% from 2018, according to figures from the Responsible Investment Association Australasia. Responsible investment funds outperformed mainstream funds over 1, 3, 5 and 10-year time horizons, said the report, but just 27% of the 165 investment managers assessed are taking a ‘leading approach’ to responsible investment. The assessment concluded that considering ESG factors is now considered a minimum standard for good investment practise in the country, with other priorities including corporate engagement and negative screening. However, 36% of investment managers do not disclose their holdings publicly, making it a key area for improvement, the authors said.

ESG credentials will be increasingly important for covered bonds, according to Moody’s. “The coronavirus pandemic has highlighted the relevance and potential credit impact of ESG risks,” it said in a research note. “In the aftermath of the pandemic, European investors, regulators and other stakeholders will increasingly scrutinise covered bonds' ESG credentials, incentivising issuers to reduce ESG credit risks over time”. It added that EU regulatory efforts would also push ESG up the agenda when it comes to credit risk. 

A UN Forum on Sustainability Standards report, ‘Scaling up Voluntary Sustainability Standards through Sustainability Public Procurement and Trade Policy’, explores how government spending can drive the uptake of voluntary sustainability standards. Isabelle Durant, Deputy Head of UNCTAD, said such rules, which focus on not harming people or the environment, “have been recognised as potentially transformative tools for governments to realise their sustainability commitment. If used appropriately with trade policy, they could change our course toward sustainable development,” she said.