The Government of the Grand Duchy of Luxembourg: International Climate Finance Strategy

The Luxembourg Ministry of Finance in collaboration with the Ministry of Environment, Climate and Sustainable Development have recently adopted a Sustainable Finance Strategy to further develop Luxembourg’s financial center’s role in international sustainable finance.

Luxembourg has also established an International Climate Finance (‘ICF’) Strategy to transform it’s domestic financial sector while offering expertise and capacity building to willing developing countries in setting similarly ambitious objectives and supporting their implementation. The ICF is focused on existing and new financial instruments that strengthen the focus on climate interventions in developing countries and leverage new and additional funding. Notably, the ICF will support the following:

• Sustainable financial market development and products with the aim of implementing Art. 2, para (1)c of the Paris Agreement3;
• De-risking of financing solutions, aggregation and collective investment vehicles, project preparation facilities for financing renewables, energy efficiency, land-use, natural capital, decarbonized and resilient infrastructure and other climate finance solutions to attract private capital

Luxembourg’s financial center is becoming an internationally recognized, leading hub for sustainable finance and the primary center for listing green bonds with a global market share of more than 50%,

Luxembourg issued in 2020 the first sovereign, triple-A rated sustainability bond aligned to the new EU Taxonomy for Sustainable Activities.

Community level capacity building for a resilient building stock is among the environmental priorities for the Luxembourg Ministry of Environment, Climate and Sustainable Development. Luxembourg seeks to ensure that substantial amounts of international climate finance reach the most vulnerable communities and allow them to implement urgently needed adaptation activities in their local context.