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Étienne de Callataÿ Sustainable investment pioneer

After the ESG winter Finance prepares for spring

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FOCUS ONESG ALFI FINANCE & LPEA

Edito

Moins de reporting, plus de risques Que restera-t-il de la CSRD une fois passée à la moulinette européenne ?

La directive sur la publication d’informations en matière de durabilité, pilier du Green Deal, est en pleine révision dans le cadre du projet de simplification omnibus. Ses obligations ont déjà été repoussées de deux ans pour les entreprises qui n’ont pas encore commencé à les mettre en œuvre. À l’heure où ces lignes sont écrites, les institutions européennes n’ont toujours pas trouvé d’accord sur le fond du texte. Mais quelle que soit l’issue des débats sur le champ d’application ou les plans de transition, le secteur financier sortira perdant de cette « simplification ».

Car en réduisant le nombre d’entreprises tenues de publier un reporting extrafinancier, on réduit d’autant la quantité de données disponibles.

Et sans données, comment les banques, les assureurs ou les gestionnaires d’actifs peuvent-ils évaluer correctement leurs expositions et gérer le risque climatique ?

Derrière la bataille visible de l’omnibus, une autre se joue plus discrètement : celle des normes

européennes d’information en matière de durabilité (ESRS), pilotées par l’Efrag. Leur simplification, légitime et utile, permet d’éliminer certains doublons. Mais à trop alléger le dispositif, on risque de perdre des informations essentielles : certaines entreprises pourraient, demain, ne plus avoir à mesurer l’impact réel de leurs risques de durabilité.

Le coût et la fiabilité des données ESG demeurent un casse-tête pour les acteurs financiers. Ils ont raison de le répéter avec insistance. Il leur faut désormais se mobiliser pour éviter que la simplification promise ne tourne à l’appauvrissement du reporting. Car sans transparence, la finance durable risque de devenir un slogan vide – et le Green Deal, un idéal privé de boussole.

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ESG finance after the winter 006

SOMMAIRE

de Callataÿ 006 Etienne ESG investments after the winter

De Vuyst (Raiffeisen) 016 Sandrine Clients ESG : des attentes en mutation

Roux (ABBL) & Serge Weyland (Alfi) 018 Sandrine Sustainability : the risky bet on easing rules Stuart (Carbone 4) 022 Christina CSRD : la réalité de la charge financière Gehlkopf (CSSF) 026 Laura L'information ESG, levier stratégique

Pierret (Université du Luxembourg) 028 Diane La résilience climatique testée tous azimuts

Dias (ABBL) et S. Reverdiau (Alrim) 034 A. Les risques de durabilité, un défi majeur Green Finance Index 15 040 Global Radar

Ederlé (Société Générale) & G. Heinrich (Raiffeisen) 042 A. Formation : l'ère de l'ESG pour tous

Halling (Université du Luxembourg) 046 Michael Sustainable finance on the academic map

Hamon (Luxembourg Stock Exchange) 052 Laetitia Transition finance takes centre stage at LuxSE

Photos : Maurice Jaccard, Patricia Pitsch

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Roth, Bruno Colmant & others 056 Gilles Defence and ESG : a marriage of reason Zubairi (Lhoft) 058 Nasir AI-powered tools to boost ESG reporting

Grishankova 064 Svetlana Transparency battle in market for ESG ratings

Delas (Luxflag) 068 Isabelle Why social taxonomy deserves investor focus Octavie Dexant (Axa Luxembourg)

070 & Michael Geeroms (CapitalatWork) Forecast

PAPERJAM — EXTRA

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ESG FINANCE

Conversation with Étienne de Callataÿ

ESG investments after the winter Marc Fassone, Journalist Maurice Jaccard, Photographer

Politically attacked and suffering from underperformance for the past two years, the ESG investment sector is under pressure. Étienne de Callataÿ, cofounder of Orcadia Asset Management, remains optimistic about its development potential.

11.2025

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ESG FINANCE

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PAPERJAM — EXTRA

Annual returns of MSCI US equity indices, 2022-2025 (%) 35

2022

2023

2024

2025*

30

25

20 15

10 5

22,5

28,6

33,2

26,5

0

-5

-10

-2,2

-14,8 -18,8

-5,5

-15

-20

US MSCI (standard)

US MSCI (SRI)

Annual returns of MSCI European equity indices, 2022-2025 (%) 20

2022

2023

2024

2025*

15 10 5

16,1

17,9

8,8

7,6

10,6

0 -5

-9,7

-13,6

-1,7

-10 -15 Europe MSCI (standard)

Europe MSCI (SRI)

These charts show the annual returns of MSCI equity indices for the US and Europe, comparing standard indices and socially responsible investment (SRI) versions from 2022 to 2025. * As of 29 August 2025 Source: Bloomberg

ESG FINANCE

How is the ESG investment sector doing?

Not very well. We are facing headwinds, mainly from across the Atlantic--both political and financial.

The political headwinds are not hard to identify. Just look at the Trump administration’s stance on renewable energies. Of course, responsible investment cannot be reduced to the environment alone, nor the environment to fossil fuels, but it is emblematic.

Today, what suffers most, at least in the media and in people’s minds, is the environmental dimension--with the difficulties faced by major European companies active in renewables such as Vestas, or the “drill baby drill” mantra of Trump. We can also see it in the retreat from regulatory and transparency requirements on environmental matters. On top of this political dimension, there is a financial one: responsible indices underperformed traditional indices in 2024, and this has continued into 2025.

What explains this underperformance?

There is no unanimous explanation.

Some are very specific. For example, if you look at MSCI indices, MSCI did not include Nvidia in its SRI index (one of the first socially responsible investment indices, launched in 1990) until May 2024, and therefore missed most of the stock’s surge. Beyond company-specific cases, there are also sectoral dimensions. The defence sector, for example, is thriving.

Can we speak, as some do, of an “ESG winter”?

Yes--as long as we remember that after winter comes spring. There are headwinds at the moment, but there is no reason to think they will be permanent. For now, we must weather

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“ Environmental issues are not ‘rich kid problems.’”

Economist and sustainable investor Belgian economist Étienne de Callataÿ, born in 1962, is well known in Luxembourg’s financial centre for having been chief economist and a member of the management committee at Banque Degroof. In 2015, he founded the wealth management company Orcadia Asset Management, where he is chief economist and chair of the board. He holds degrees in economics from the University of Namur and the London School of Economics. He currently teaches macroeconomics and public finance at the University of Namur.

the winter winds and prepare for the spring ahead. We will emerge from this winter. ​ Where do you see the future and rebound of ESG investments?

In the recognition that failing to act on environmental issues is detrimental to medium- and long-term economic prospects. It is not just about pleasing others when we address environmental sustainability--it is also about safeguarding our own economic potential within the horizon of a single generation.

But given what seems to be setbacks from the US, China and India, is ESG in danger of becoming a European cultural peculiarity--and one that penalises its economy?

At first glance, one might think so. But I wouldn’t put it that way.

Environmental issues are not “rich kid problems.” As soon as living standards rise--which is the case in China and India--there is strong demand for a better environment. Look at the electrification of the Chinese car fleet.

People are sensitive to this. That said, if Europe’s efforts slow down global warming, the Chinese, Indians and Americans will benefit without lifting a finger. But the benefits for Europeans alone are already sufficient to justify our action.

ESG FINANCE

Are investors still willing to pay the price for ESG investments?

In 2021, ESG indices were more expensive in terms of price-earnings ratios than conventional market indices. There was a premium for responsible companies. That premium has shrunk to the point of almost disappearing. I believe there are good reasons to pay more for responsible companies--because they are less risky and better prepared for a future that will undoubtedly be different. The ESG valuation premium will be rebuilt.

Can pensions be funded through responsible investments?

Most certainly. And I would say it is highly recommended, because these are clearly investments with an intergenerational concern built into their DNA. They emphasise durability and sustainability. Such investments are more likely to remain relevant in ten years’ time than comparable conventional ones.

Many banks or asset managers are withdrawing from ESG initiatives such as the Net Zero Banking Alliance, including American banks and UBS. Do you see these as isolated events or the beginning of a trend?

These are not isolated events.

In the banking and asset management world, more than one player is tempted to do the same. These withdrawals are meant to flatter either short-term profitability or certain political powers. I find this disloyal and I judge such behaviour harshly.

One can always change one’s opinion, but in this case no one can invoke new scientific evidence claiming that global warming does not exist.

Unfortunately, this is a short-term and political positioning.

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PAPERJAM — EXTRA

664 In 2024, the Luxembourg Stock Exchange/ Luxembourg Green Exchange admitted more than 660 new sustainable bonds, totalling €260bn.

This was the second-best year in terms of issuance volume since 2021, confirming that ESG investment momentum remains intact, according to LuxSE.

The ESG winter according to the ABBL The Luxembourg Bankers’ Association (ABBL) has also observed an “ESG winter” marked by “a regulatory pause linked to the broader macroeconomic and political context,” says its secretary general, Sandrine Roux. “However, we are seeing a strong commitment from our members to keep advancing their internal ESG reporting and risk management frameworks, in line with the expectations of our regulator.”

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Do these attitudes not influence regulators and politicians? In this context, what do you expect from projects to simplify CSRD, SFDR and taxonomy regulations?

Unfortunately, this is where shorttermism prevails. Who is against simplification? No one. But it is regrettable that we seek simplification almost exclusively in terms of environmental requirements. There are many other areas where simplification could be pursued--building permits, taxation, social security. These areas are ripe for simplification, yet nothing is heard. Do we hear the banking lobby calling for simplification of the tax advantages it enjoys for different savings products? Not at all.

The current discourse on administrative simplification is not credible.

It is motivated by something else.

The EU has estimated the benefit of administrative simplification at €6bn.

Compared with the eurozone’s GDP, that is negligible. Dropping environmental requirements for this reason alone makes no intellectual sense.

Is defence a responsible investment?

Of course. We must hope that we have weapons and that Ukrainians have weapons, and for that we need companies to manufacture them. Investing responsibly should not mean being naïve or going into battle with a flower in your rifle. That said, today both Ukrainians and Russians are using landmines. Are landmines admissible weapons? Having recently attended a presentation by Handicap International, my answer is no.

Once the door is opened to investment in defence, the question will inevitably arise as to what kind of weaponry is admissible--defensive, offensive, conventional, chemical… and reaching agreement on that will be very difficult.

I do not wish to cast blame on an investor who chooses the defence sector, but for now I prefer to continue excluding weapons. That said, nothing prevents an investor concerned with environmental, social and governance issues from adding them if they wish.

It is a bit like salt in a meal: if you find the dish served to you is not salty enough, you can add some. Taking it away is much harder.

Should we instead focus on redefining ESG investments, even if that means broadening or softening the framework?

Absolutely. There is a logic to this.

Some considerations may have been valid in the past but are no longer relevant. This is currently the case with the defence sector. If tomorrow we were to find a way to produce clean gas, then investments in gas should be allowed. Similarly, if one day we discover a plastic that can be easily and endlessly recycled, investments should be possible there too. It must be an evolving process that takes account of both geopolitical and technological environments.

These rules are not meant to be carved in stone.

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PAPERJAM — EXTRA

Sponsored content by LSC360

Ralf Köhler, Senior Project Director Environment & Sustainability at LSC360, embodies engineering in the service of dialogue and sustainable transition.

As Luxembourg continues to pursue ESG goals and push the economy towards a circular model, one engineering group is helping companies to tackle the challenges.

Luxembourg has made no secret of its desire to take climate action and move toward a circular economy. With the adoption of ESG-related regimes such as the CCUS/CDR Action Framework - which pushes for carbon capture and carbon dioxide removal - the EU Taxonomy, the Sustainable Finance Disclosure Regulation (SFDR), and the Corporate Sustainability Reporting Directive (CSRD), private and public sector entities face new and growing pressure to adapt. At the same time, incentives have been created to mobilize private investment to help reach net-zero emission targets and encourage sustainability criteria in corporate business activities.

Ralf Köhler is Senior Project Director – Environment & Sustainability at LSC360. “Our company aims to drive transformation and help clients by integrating circular design, biobased materials, conducting life cycle and carbon assessments, uncovering inefficiencies, and acting as guide through the process of obtaining certifications. We also deal with

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Engineering sustainability for the future

11.2025

“ Increased profitability, sustainable solutions and resilience is what we offer to clients.”

Ralf Köhler, Senior Project Director Environment & Sustainability, LSC360

innovative energy solutions and demonstrate systemic approaches to implementing renewable energy systems in buildings or neighborhoods in an economical and climate-efficient manner.”

The division to which Ralf Köhler belongs with clients from various target groups such as SMEs, real estate firms, financial institutions, industrial companies, and municipalities. With LSC360’s help, entities from these sectors can obtain new technical solutions in implementing their ESG goals in a sustainable and future-oriented manner, largely through targeted measures for decarbonization, circular economy modelling, and clean energy.

“LSC360’s value lies in its integrated, transdisciplinary approach that combines technical expertise with in-depth ESG and sustainability knowledge,” Ralf Köhler says. “We provide customized decarbonization strategies and have the ability to link technical innovation with regulatory and financial frameworks, delivering

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impactful, future-proof solutions for clients undergoing the green transition.”

In other words, LSC360 can serve clients both from the technical side and the regulatory side to not only be more efficient in terms of energy and material flow management, but also to boost the confidence of stakeholders and be eligible for - and attractive to sustainable finance.

One target group consists of SMEs such as materials providers, construction companies, and logistics firms, among others. LSC360 provides them with technical and scalable strategies to stay ahead and thrive in the wake of new regulations. Ralf Köhler says: “We analyze material flows to uncover inefficiencies and to propose new circular design, modular, and biobased construction. We assist in reducing waste material with lower environmental impacts. We use AI-based instruments to facilitate our planning work and make it more efficient. This helps clients shift from a linear to a more dynamic and intelligent model, which is our overarching goal.”

LSC360 also works closely with players in the real estate and sustainable construction sector, helping them to be compliant, make properties more energy-efficient, and obtain ESG certification that provides greater transparency and guarantees the life cycle of buildings, all of which result in long-term added value in the market. LSC360 also works on public and private housing projects, helping construction and project management companies to both decarbonize and carry out projects more economically. For many clients, LSC360 can provide a technical assessment along with economic solutions: feasibility studies for each project and strategic guidelines to include ESG investments in corporate design. “We also work closely with industry and manufacturing, which require very complex strategies

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to decarbonize their processes and products,” Ralf Köhler says.

“This is one example of how our transversal approach empowers us to create customized solutions. Our firm can also assist clients with carbon reporting, training for their staff, and integrating circular economy solutions in their corporate infrastructure.”

LSC360 can also guide clients through site deconstruction. “We give clients a strategic pathway to deconstruct materials and provide inventory with a second life.”

LSC360 participates heavily in R&D, sometimes in collaboration with the Luxembourg Institute of Science and Technology (LIST) or other research partners. “We’re working on joint projects to develop new technical solutions, whether that is a digital urban planning tool, a Life Cycle Assessment (LCA) to quantify environmental impact of land degradation, new wood-composite applications or a product development based on recycling materials,” Ralf Köhler says.

LSC360 is also involved in training the next generation of engineers to incorporate sustainability and the circular economy in their work. “Embedded in research programs and university lectures, we provide training to help students to better understand the realities of the circular economy and its feasibility in the market.”

To learn more about recent ESG strategies and how LSC360 can help private and public entities make the transition, visit our website

PAPERJAM — EXTRA

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Conversation avec Sandrine De Vuyst

Clients ESG : des attentes en mutation

Thierry Labro, Journaliste Julian Pierrot, Photographe

Longtemps reléguée derrière les enjeux environnementaux, la gouvernance s’impose désormais comme un pilier de la durabilité au Luxembourg. Membre du comité exécutif de Raiffeisen, Sandrine De Vuyst observe une prise de conscience croissante, notamment chez les PME.

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11.2025

« Nous ne sommes pas des gendarmes » Raiffeisen a-t-elle déjà écarté un projet immobilier pour manque de durabilité ? « Il n’y a pas que le “E” dans ESG, il y a aussi le “S”, répond Sandrine De Vuyst.

Nous n’avons pas refusé de projet pour un mauvais certificat énergétique : ces clients rencontrent déjà plus de difficultés à obtenir de bonnes conditions.

Nous avons préféré créer un produit dédié à la rénovation, avec des critères adaptés, afin d’encourager la transition. Nous ne sommes pas des gendarmes, mais des partenaires. » Lire l’interview complète sur paperjam.lu

Avez-vous constaté une évolution de l’intérêt de vos clients pour l’investissement ESG ?

Il faudrait peut-être distinguer selon le type de client. Les entreprises, pour des raisons assez évidentes de coûts et d’efficacité, s’intéressent à cette problématique depuis un certain temps. Que ce soit pour le photovoltaïque ou la digitalisation, le sujet leur est bien connu.

Du côté des clients particuliers, je ne suis pas certaine qu’ils se dirigent spontanément vers la durabilité.

Cependant, la hausse des coûts des matières premières, combinée aux aides publiques, a suscité un engouement pour les énergies renouvelables.

En matière d’investissement, avec Mifid et l’entrée en vigueur des critères ESG en 2022, on constate que la demande pour des produits exclusivement ESG reste limitée.

Pourquoi ?

Parce que les clients ne veulent pas fermer la porte aux autres types d’investissement. La rentabilité et la performance d’un portefeuille restent plus importantes que d’avoir exclusivement des investissements ESG. Beaucoup ne s’opposent pas aux investissements ESG, mais très peu souhaitent investir uniquement dans ce type de produits. Ils veulent garder la latitude de l’ensemble du spectre, même si de plus en plus, ils sont conscients des problématiques ESG. Quels aspects de l’ESG suscitent le plus d’intérêt chez vos clients ?

Pour tout le monde, particuliers comme entreprises, le premier axe a surtout été l’environnement car c’est celui qui a été le plus mis en avant par les médias. Mais la gouvernance et la responsabilité sociale ne sont pas pour autant délaissées. Au Luxembourg, on voit de plus en plus d’entreprises

ESG FINANCE

– notamment les plus petites – s’orienter vers la gouvernance et la bonne gouvernance, que ce soit via la banque et ses conseillers ou à travers leurs propres initiatives. Des affaires comme celle de Caritas poussent dans cette direction. La gouvernance fait aujourd’hui l’objet d’une prise de conscience importante, ce qui lui confère une nouvelle dimension et exige une attention particulière.

Les entreprises revoient très souvent leur mode de gouvernance.

Quelles sont les données que vous pouvez partager sur vos clients ?

Pour tout ce qui est crédits aux particuliers, on constate une évolution sensible et positive dans l’aspect ESG. Du côté professionnel, cela continue mais ils étaient déjà plus avancés.

Et sur la partie placement ?

Pour vous donner un ordre d’idée, la majorité de nos encours en fonds est investie dans des fonds Article 8 et Article 9 (du règlement européen SFDR, ndlr).

Sur le marché, certains produits se présentent comme ESG alors qu’ils ne le sont pas vraiment. Comment évitez-vous le greenwashing ?

D’abord, nous nous appuyons sur la réglementation et veillons à être conformes. Ensuite, nous utilisons des outils externes comme MSCI. Nous avons fait appel à des consultants, notamment Forethix. L’objectif est de mettre en place quelque chose de solide, pas seulement selon les critères de Banque Raiffeisen, mais validé par des acteurs reconnus dans ce domaine.

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Sustainability: the risky bet on easing rules As Brussels prepares to lighten its sustainability framework, banks, fund managers and Luxembourg’s regulator warn that poorly judged simplification could undermine both clarity and effectiveness.

Guillaume Meyer, Journalist

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CSRD: Could lower thresholds erode access to robust and comparable corporate data?

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Taxonomy: Will easing the “do no harm” test finally remove a key barrier to alignment?

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SFDR: Is a labelling system enough to end the confusion around sustainable products?

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11.2025

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Photo : ABBL

CSRD The Corporate Sustainability Reporting Directive (CSRD) stands as one of the cornerstones of the EU’s sustainable finance agenda. It requires large European companies, as well as foreign groups active in the single market, to disclose how their activities affect the environment and society.

Originally scheduled to take effect in 2025, the CSRD has been delayed by two years under the so-called “stop the clock” directive.

Whether the EU institutions can strike a political agreement before the end of the year remains uncertain. The ongoing talks in Brussels are stirring unease in Luxembourg’s financial centre. “What we see with the omnibus proposal is a step back from the initial ambition of the sustainable finance framework,” warns Thomas Collin, sustainability adviser at the Luxembourg Bankers’ Association (ABBL). He recalls that the original idea was to build a coherent ESG data chain, enabling banks and investors to base their decisions on robust and comparable information.

The CSRD was meant to be the “keystone” of that system.

This is why the ABBL is calling for a swift and clear adoption of the text into Luxembourg law.

“Today, application thresholds remain controversial. The risk is that banks will be left with

ESG FINANCE

Taxonomy less access to information than before,” he says. “For us, this is a clear red line, because it would deprive banks of the ESG data that the European Commission had promised. Institutions would have to rely on estimates or proxies, or ask clients directly--adding to the administrative burden. That is not simplification; it is complication.”

ABBL secretary general Sandrine Roux calls for a more pragmatic stance. “We advocate a proportionate approach: not necessarily fewer disclosures, but data that remain relevant to feed our banks’ databases,” she stresses.

Collecting information is already “a considerable task internally,” she adds, warning that slowing progress now could create a lag that will prove hard to recover later.

Sandrine Roux , ABBL

The EU Taxonomy, adopted in 2020, is a classification system designed to define what qualifies as an environmentally sustainable economic activity. To be deemed “aligned”, an activity must make a substantial contribution to one of six objectives-from climate change mitigation to biodiversity protection--while avoiding significant harm to any other and meeting minimum social safeguards.

In July 2025, the European Commission unveiled a first “omnibus” package to simplify the framework. The changes, effective from January 2026, narrow the scope of companies concerned, ease the “Do No Significant Harm” (DNSH) test and revise certain materiality thresholds.

For Laetitia Hamon, head of operations and sustainable finance at the Luxembourg Stock Exchange, the adjustments are welcome. “The DNSH requirement was extremely difficult to report and stood as a barrier to alignment,” she says.

“Its simplification is a very positive step--though the practical outcome remains to be seen.”

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PAPERJAM — EXTRA

ESG FINANCE

3 SFDR The CEO of the Association of the Luxembourg Fund Industry calls for a two-step approach.

First, targeted adjustments: simplifying disclosure obligations and acknowledging the concept of transition, so that the most ambitious products are not reserved only for companies that are already “green.”

“That has been one of SFDR’s major failings,” he says, “as it discourages support for players still on their path to sustainability.” In a second stage, he advocates a broader rethink of the regulation’s structure, with three categories: transition products, fully sustainable products and a wide “ESG integration” segment. “But this needs time and broad

consultation, including with end investors,” he stresses.

Claude Marx, director general of the Luxembourg Financial Sector Supervisory Commission (CSSF), echoes the call for clarity. “I would strongly support turning the SFDR from a disclosure regime into a labelling regime,” he writes in the foreword to the regulator’s 2024 annual report. “This would make it simpler, especially for retail investors, and remove confusion in the asset management industry. The change must be accompanied by clear communication, also lacking today, of the sustainability strategies, explaining what transition is, what impact is and what engagement is.”

“ The SFDR has failed to make clear the true nature of the products on offer.”

Serge Weyland, Alfi

Photo : Romain Gamba

The EU’s Sustainable Finance Disclosure Regulation (SFDR) was introduced in 2021 to increase transparency around investment products marketed as “sustainable” and to curb the risk of greenwashing. It requires financial institutions to disclose, both at entity and product level, how they incorporate environmental, social and governance factors into investment decisions. Yet the first years of implementation have exposed significant shortcomings.

The European Commission is therefore preparing a revised version--labelled SFDR 2.0--expected by the end of 2025, following a wide-ranging consultation launched this spring.

For Alfi CEO Serge Weyland, the verdict is blunt. “Although the SFDR was successful in firmly embedding ESG screening in portfolio management, it has failed to make clear to the end investor the true nature of the products on offer,” he argues. The current classification, which distinguishes between “article 8” and “article 9” funds, is, in his view, opaque to retail clients and confusing even for professionals.

Prospectuses have become so complex that they generate “confusion and even fatigue”.

The industry, he adds, fears further poorly prepared reforms after years of costly adaptation.

Partner content

ESG investing opens new doors

Crédit : Karel Duerinckx

Michael Geeroms is a Senior Fund Manager at CapitalatWork.

“If you don’t become too ideological, ESG investing offers clear advantages.”

Michael Geeroms is a Senior Fund Manager at CapitalatWork. “If you don’t become too ideological, ESG investing offers clear advantages.”

By 2028, more than 80% of UCITS funds are estimated to incorporate a sustainability framework in one way or another. In other words, sustainability considerations have now become standard practice instead of being a niche strategy.

The concept of ESG investing remains confusing for many people.

This isn’t being helped by the many terms thrown around – ESG, SRI, sustainability, green, responsible, ethical etc. The more recent politicization, turning the concept into some sort of ideology, is not making it easier.

When analyzing a potential investment, the idea is to weigh the balance of financial returns versus potential risks. Using child labor in a production plant in a far away country? A moral problem for sure, but in financial terms first and foremost a financial risk when regulators or clients find out. Polluting water and dumping them in a river?

This used to be generally accepted, before the introduction of environmental regulations in the 20th century. Today this would lead to fines and public rejection.

At CapitalatWork Foyer Group, we have a dedicated analyst team that covers around 200 companies in detail. For our ESG investments, we apply a robust methodology to this selection of companies, which uses a dual-screening:

Negative screening is really the basics: we try to avoid exposures that might ultimately lead to a financial cost. We do this by using a combination of the United Nations Global compact principles -which guarantees a minimum standard in the domains of human rights, labor rights, the environment and anticorruption-, sector exclusions and controversy filters.

Positive screening is usually a lot more difficult to understand.

We use external suppliers to try and quantify the exposition of companies to ESG risks in general.

The idea is that sooner or later, being exposed to higher ESG risks, will lead to a financial impact.

Assessing investment risks isn’t an exact science. One of the problems is the lack of a consistent approach in the sector, and therefore an inconsistent outcome. Is nuclear green or not? Is the defense sector ethical or not? Opinions are often divided, but choices need to be made. Limits need to be imposed.

The concept is evolving, but one thing is for sure, ESG investing isn’t going away anytime soon.

CapitalatWork Foyer Group 12 rue Léon Laval Leudelange +352 437 43 6000 info@capitalatwork.lu

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CSRD : la réalité de la charge financière

Sans attendre la simplification du reporting extrafinancier voulue par l’UE, certains groupes, à l’instar de Post Luxembourg, anticipent déjà les nouvelles obligations.

Premier retour d’expérience, entre ambition réglementaire et réalités opérationnelles.

Audrey Somnard, Journaliste Julian Pierrot, Photographe

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Suis-je concernée ? Et qu’attend-on concrètement de moi ? Avant même de se demander comment se conformer à la CSRD, les entreprises posent aujourd’hui ces deux questions simples. C’est l’un des constats récurrents formulés par les experts en accompagnement ESG. Le débat dépasse en effet la pure conformité. « On met beaucoup l’accent sur les normes, mais le moteur réel, ce sont les risques et opportunités liés au climat. Chaque dixième de degré compte ; l’inaction a un coût.

Une entreprise ‘durable’ au sens premier, c’est-à-dire capable d’exister demain, intègre déjà ces paramètres », souligne Christina Stuart, consultante chez Carbone 4 Luxembourg.

Deux familles de risques dominent la réflexion : les risques physiques (sécheresses, inondations, hausse des températures moyennes) et les risques dits « de transition », liés à l’évolution des marchés, aux taxes carbone, aux nouvelles exigences des consommateurs ou à l’apparition de standards de produits plus stricts. « On peut être peu exposé physiquement et fortement exposé réglementairement ou commercialement », fait remarquer Christina Stuart.

Des risques aux solutions concrètes Pour se préparer, les entreprises doivent mettre en place une gouvernance dédiée, souvent en binôme entre la fonction RSE et la direction financière, avec relais vers les métiers. Elles doivent aussi cartographier leur chaîne de valeur, analyser les impacts croisés dans le cadre de la double matérialité, puis bâtir une feuille de route assortie d’indicateurs et d’une trajectoire.

Cette méthode dépasse la logique du reporting pour le reporting et vise la transparence sur les impacts, risques et opportunités. « On ne peut

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pas simplifier l’une sans regarder l’autre », rappelle Christina Stuart en évoquant l’interconnexion avec la taxonomie et la SFDR. Les annonces de Bruxelles sur le « stop the clock », le relèvement des seuils ou la suspension temporaire de certains standards sectoriels offrent un peu de répit. Mais cet allègement n’est pas sans effet pervers. « Des acteurs mettent en pause des investissements de long terme, qu’ils concernent des infrastructures ou des décisions stratégiques, et se cantonnent aux ‘actions sans regret’ (bilan GES, diagnostics d’adaptation, dépendances biodiversité), en attendant d’y voir plus clair sur l’audit et les exigences définitives », explique-t-elle. Selon la consultante, « l’angoisse des milliers de data points devrait progressivement s’atténuer » au fil des premiers rapports publiés et de la montée en puissance des auditeurs, mais la question de la fiabilité des données reste centrale.

Au Luxembourg, la situation se distingue de celle d’autres pays comme la France où des obligations de reporting existaient déjà. Les grands groupes luxembourgeois, tels que CFL ou Post, poursuivent leurs travaux malgré l’incertitude.

Les PME, elles, se montrent plus prudentes. Recruter un profil dédié pèse lourd dans les budgets. Le pragmatisme domine : respecter la règle sans chercher à surperformer. Pourtant, dès qu’une fonction ESG est créée, la stratégie s’en trouve modifiée, avec des impacts sur le développement de produits, les marchés ciblés et l’allocation de capital.

Un Luxembourg en mouvement prudent Post, bien que non soumise à la directive en tant qu’établissement public,

Christina Stuart Carbone 4

« L’angoisse des milliers de data points devrait s’atténuer. »

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Double matérialité : un concept clé

a choisi d’anticiper les obligations.

Le groupe a conduit une double matérialité auprès de plus de 500 parties prenantes et a instauré un comité ESG présidé par le directeur général et trois membres du comité exécutif.

Chaque thématique matérielle est suivie par un leader identifié, et un responsable des droits humains a été nommé dans le cadre du Pacte national « Entreprises et droits de l’homme ».

Isabelle Faber, directrice ressources humaines, relations publiques et RSE de Post Luxembourg, décrit dans une réponse écrite un chantier exigeant : fiabiliser les données, combler les lacunes sur les impacts financiers, intégrer la taxonomie, formaliser des politiques et plans d’action, et mobiliser les équipes à travers toute l’organisation.

Pour Post, le report du calendrier constitue « du temps utile pour fiabiliser un premier rapport ». Mais elle alerte : « Pour les plus petites structures, la mise en conformité sera extrêmement complexe. Ressources limitées, normes techniques et effet de cascade dans les chaînes de valeur risquent de mettre sous pression des PME déjà fragilisées. » Si le reporting monopolise l’attention médiatique, Christina Stuart rappelle que d’autres leviers ont déjà un effet immédiat sur la compétitivité.

Le mécanisme d’ajustement carbone aux frontières, les normes européennes CAFE pour l’automobile ou encore des cadres volontaires comme CDP et Science Based Targets influencent déjà fortement les choix industriels et commerciaux. Ces instruments, parfois moins visibles que la CSRD, modifient néanmoins en profondeur les arbitrages d’investissement, les stratégies de production et même les relations avec les banques et les investisseurs.

Du coût de la conformité à la compétitivité La question des coûts reste sans réponse unique. Tout dépend de la maturité initiale de l’entreprise, de ses systèmes d’information, de son périmètre et de son ambition. Mais Christina Stuart insiste : l’inaction a elle aussi un prix, qu’il s’agisse de perte d’accès au capital, de désavantage compétitif ou de désaffection des clients.

Pour les grands groupes, la CSRD est une contrainte mais aussi une opportunité de consolider leur stratégie et leur crédibilité. Pour les PME, une simplification sans perte de qualité pourrait faciliter une adoption plus large et plus équitable. Dans tous les cas, conclut la consultante, « la réglementation est un cadre.

Le fond du sujet, c’est la capacité à continuer à exister dans une économie qui bascule ».

La CSRD impose d’évaluer à la fois l’impact de l’entreprise sur l’environnement (matérialité d’impact) et l’impact de l’environnement sur l’entreprise (matérialité financière). L’exercice oblige à consulter fournisseurs, clients, investisseurs et parties prenantes afin de déterminer ce qui est réellement significatif, puis à traduire ces priorités en indicateurs suivis et en plans d’action concrets.

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Sébastien Lambotte, Journaliste

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1 Décider avec sens

Au-delà des obligations de reporting, une bonne gestion de l’information ESG doit avant tout permettre de soutenir les prises de décision et d’améliorer la gestion des risques. Coordinateur ESG au sein de la CSSF, Laura Gehlkopf partage le point de vue et les recommandations de l’autorité de surveillance en la matière.

Avec les récents débats autour de l’omnibus et de la SFDR (lire pages 18-20), la pertinence des obligations liées à la gestion de l’information sur la durabilité dans la finance a pu être remise en question. Améliorer la gestion de ces données n’en demeure pas moins un enjeu clé, rappelle l’autorité de surveillance. « L’objectif qui sous-tend l’ensemble du cadre réglementaire reste plus que jamais d’actualité, comme l’ont démontré les événements climatiques de cet été », commente Laura Gehlkopf, coordinateur ESG au sein de la CSSF. Autrement dit, un possible allègement des obligations ne doit pas aller à l’encontre d’une meilleure prise en compte des risques liés à la durabilité. « L’objectif est non seulement de rendre la conformité plus facile, mais aussi de veiller à ce que les informations sur la durabilité collectées et publiées par les entités concernées permettent une prise de décision éclairée. »

L’information ESG, levier stratégique

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2

3

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4

Élargir la focale

Voir l’opportunité

Accompagner

La disponibilité d’informations harmonisées, normalisées et fiables en matière de durabilité est capitale pour une bonne gestion de l’information ESG et pour garantir aux investisseurs un accès à des données solides. « Le reporting réglementaire représente un outil de communication structuré, souvent normé et destiné à répondre à des exigences réglementaires ou aux attentes des investisseurs, explique Laura Gehlkopf.

Cependant, l’information ESG ne se résume pas au seul reporting réglementaire. Elle englobe un ensemble plus vaste de données, qui traduisent la manière dont une organisation intègre les enjeux environnementaux, sociaux et de gouvernance dans sa stratégie et sa culture. »

Il est important d’aborder l’information ESG dans une logique plus systémique et stratégique, non comme une contrainte, mais comme une opportunité. « L’information ESG permet une meilleure information des organes de direction, afin d’améliorer le processus décisionnel, la gestion des risques et de renforcer la résilience », explique Laura Gehlkopf, qui invite à être particulièrement attentif aux aspects suivants : • garantir la précision et l’intégrité des données collectées pour que le reporting soit crédible et auditable ; • intégrer les facteurs ESG de manière transversale dans la gouvernance de l’entité, plutôt que de les cantonner à des équipes spécifiques ; • veiller à la cohérence des informations en s’appuyant sur plusieurs sources et en croisant les indicateurs clés.

La CSSF réalise régulièrement des exercices pour aider les acteurs à améliorer la qualité des publications non financières et fournir des points d’attention au marché. Elle a récemment publié un rapport évaluant la préparation des émetteurs d’obligations aux exigences de la directive CSRD et proposant des pistes d’amélioration concrètes.

« L’information ESG ne se résume pas au seul reporting réglementaire. » Laura Gehlkopf

5 Harmoniser Pour les émetteurs d’obligations, deux pistes ont été avancées pour renforcer la conformité à la CSRD : la structure des rapports et l’analyse de matérialité.

S’agissant du premier point, l’utilisation de la trame des normes européennes de reporting (ESRS) facilite la lecture et la comparabilité. Pour le second, il est recommandé de décrire de manière concrète le processus d’analyse des impacts, risques et opportunités ESG, en privilégiant des informations spécifiques à l’entité plutôt que des contenus génériques ou repris des ESRS.

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Conversation avec Diane Pierret

La résilience climatique testée tous azimuts

Sebastien Lambotte, Journaliste Patricia Pitsch, Photographe

Les stress tests climatiques gagnent en profondeur grâce aux travaux d’instituts académiques qui complètent l’analyse des banques centrales. Pour Diane Pierret, professeure de finance à l’Université du Luxembourg, publier ces signaux d’alerte sert la société.

11.2025

Pourquoi est-il essentiel de mieux intégrer les impacts climatiques dans la gestion des risques financiers ?

Les risques climatiques ont une influence non négligeable sur la valeur des actifs financiers à bien des égards, au point de constituer une menace pour la stabilité du système financier s’ils ne sont pas suffisamment appréhendés. Aujourd’hui, un investisseur anticipe les impacts climatiques, comme les catastrophes naturelles ou les enjeux de transition énergétique, sur les performances financières futures de ses investissements. Les risques climatiques affectent la valeur boursière de nombreuses entreprises. Du côté des assureurs, les risques sont encore plus tangibles : catastrophes naturelles, inondations ou incendies entraînent des pertes immédiates.

Pour la Banque centrale européenne (BCE), dont le mandat inclut la stabilité financière, ces risques doivent être intégrés dans l’évaluation globale du système.

Comment se traduit concrètement le risque climatique ? Quelles en sont les composantes ?

On peut en distinguer deux principales. Le risque physique est lié aux événements climatiques extrêmes (ouragans, incendies, inondations, etc.) qui entraînent des pertes directes, notamment dans l’assurance couvrant les dommages matériels.

Le risque de transition est davantage un risque de marché qui affecte la valeur des portefeuilles d’actifs. Il est lié aux évolutions réglementaires, technologiques et économiques visant à décarboner l’économie.

Les sociétés fortement exposées aux énergies fossiles ou à des modèles non durables voient leur valorisation fragilisée.

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Comment les banques centrales appréhendent-elles ces enjeux ?

Depuis quelques années, la BCE et d’autres superviseurs mènent régulièrement des stress tests climatiques. Ces exercices consistent à projeter sur les bilans des institutions financières différents scénarios : par exemple, des catastrophes climatiques ou une transition rapide vers une économie bas-carbone.

Les résultats permettent de mesurer la résilience des acteurs. Récemment, la BCE a annoncé qu’à partir de mi-2026, le risque climatique serait intégré dans son collateral framework. Autrement dit, les banques ne pourront plus obtenir le même niveau de financement contre des actifs exposés à des risques climatiques élevés.

L’enjeu, pour les acteurs financiers, reste de bien évaluer les risques climatiques, de mieux les intégrer.

En quoi la mesure de ces risques est-elle complexe ?

Par définition, le risque est une variable latente : il n’est jamais directement observable. Chaque mesure est donc imparfaite. Cependant, si plusieurs mesures convergent, la confiance grandit. Les banques centrales utilisent leurs propres modèles, fondés sur des données souvent confidentielles. En parallèle, des instituts académiques comme le Volatility and Risk Institute et son Volatility Laboratory, cofondé par Robert Engle avec qui j’ai eu l’opportunité de travailler, publient des indicateurs basés sur les prix de marché, qui reflètent la perception du risque climatique de milliers d’investisseurs.

Ces approches complémentaires permettent d’enrichir l’analyse.

Comment l’approche méthodologique du Volatility Laboratory

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Experte en stress tests Diane Pierret est professeure assistante au Département de finance de l’Université du Luxembourg.

Ses travaux de recherche dans le domaine bancaire l’ont amenée à s’intéresser aux réponses des banques aux pratiques de stress tests réglementaires, aux conséquences des interventions non conventionnelles des banques centrales, aux liens entre dettes souveraines et banques, à la rentabilité bancaire et à la politique monétaire.

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« Les investisseurs comme les citoyens ont le droit de savoir. »

L’ombre tutélaire d’un prix Nobel Robert F. Engle, lauréat du prix Nobel d’économie en 2003, est un expert des risques financiers liés au climat. Il propose des approches pour quantifier et gérer ces risques en utilisant des méthodes de modélisation de la volatilité financière.

Ses travaux portent sur la construction de portefeuilles d’investissement résilients, le stress testing des institutions financières et la tarification des risques environnementaux afin de protéger les finances et la planète.

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rend-elle compte de l’impact des risques climatiques ?

L’équipe du Volatility Laboratory, dont je fais toujours partie, a développé plusieurs méthodologies. Après avoir mesuré le risque systémique bancaire post-crise de 2008, puis le risque de transition énergétique, les chercheurs ont conçu un outil ciblant l’exposition des assureurs aux risques physiques climatiques. Concrètement, ils construisent un facteur climatique, c’est-à-dire un portefeuille représentatif d’actifs immobiliers exposés aux catastrophes naturelles. Lorsque survient un événement climatique extrême, la valeur de ce portefeuille baisse. Ils mesurent ensuite la sensibilité du prix des actions des compagnies d’assurance à ce facteur climatique, permettant d’évaluer les pertes des assureurs dans un scénario de stress où le facteur climatique serait soumis à une forte baisse.

Les données et la méthodologie sont publiques, garantissant une transparence totale.

une étude menée avec Robert Engle et ses coauteurs, le manque de capitalisation du secteur de l’assurance lié au risque climatique physique a atteint 10 milliards de dollars en 2021, dans un scénario de crise sévère. Ces résultats ne déclenchent pas automatiquement des recapitalisations – contrairement aux stress tests bancaires – mais ils envoient des signaux d’alerte clairs.

Justement, la transparence accrue ne crée-t-elle pas une inquiétude pour les institutions ?

Oui. Ces mesures, accessibles à tous, permettent de comparer la vulnérabilité des acteurs. Un assureur apparaissant comme très exposé aux impacts climatiques, ou sous-capitalisé au regard des risques, forcément, n’apprécie pas cette approche transparente. Mais publier ces résultats constitue un service rendu à la société : les investisseurs comme les citoyens ont le droit de savoir.

Quels enseignements tirons-nous des résultats des travaux du Volatility Laboratory ?

Les stress tests climatiques montrent que les pertes potentielles ne sont pas seulement théoriques. Selon

Faut-il s’inquiéter de cette situation ?

Comment réagir ?

Il faut surtout se préparer. Les stress tests ne prédisent pas l’avenir, ils simulent des scénarios extrêmes pour tester la résilience du système. Mais leur rôle est crucial : ils rappellent que le risque climatique n’est pas abstrait et qu’il peut se traduire en pertes financières massives.

Together, we turn vision into impact At Elvinger Hoss Prussen, we stand beside our clients as trusted partners, helping them anticipate change, seize emerging opportunities, and integrate ESG principles at the core of their strategy, turning challenges into catalysts for lasting value and positive transformation.

LUXEMBOURG HONG KONG PARIS

Read our latest ESG report

Elvinger Hoss Prussen www.elvingerhoss.lu

NEW YORK Elvinger Sàrl PLLC www.elvinger.us

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Intégrer les risques de durabilité, un défi majeur L’intégration des risques liés à la durabilité s’impose aux institutions financières.

Derrière l’exigence réglementaire ou encore la mise en œuvre de stress tests, c’est une transformation structurelle qui s’opère.

Sébastien Lambotte, Journaliste

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Le climat, nouveau facteur de risque ?

2

Données ESG : un maillon toujours faible ?

3

Comment la régulation force l’adaptation ?

4

Faut-il uniformiser pour comparer ?

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Que révèlent les stress tests de l’UE ?

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Stress test climatique européen 2024 : le pire scénario

Source : Banque centrale européenne

Un risque mieux intégré Le développement d’une économie plus durable, et avec lui le verdissement de la finance, implique la mise en œuvre de nouvelles approches de gestion des risques. « Le monde de l’assurance a été l’un des premiers à intégrer le risque climatique dans ses approches.

Au niveau des banques, s’il ne s’agit pas d’un risque nouveau, il est de plus en plus encadré en raison des évolutions réglementaires », commente Alexandre Dias, conseiller en finance durable au sein de l’ABBL. Que l’on soit assureur, banquier ou gestionnaire de fonds, le risque climatique et de transition – et plus largement le risque de durabilité – est désormais mieux pris en compte dans une approche globale de gestion des risques. « Des changements de marché, liés à la transition écologique, peuvent affecter la valeur d’une entreprise, illustre Alexandre Dias. Avant d’accorder un crédit, il est essentiel pour les banques d’intégrer ces aspects et leurs impacts financiers si elles souhaitent prévenir des pertes ou des défauts de paiement. C’est au cœur de leur métier. »

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Total des pertes de premier et de second tours* (en % de la valeur des actifs concernés) Banques

Assurance -2,9

-5,8

Fonds d’investissement

Scénario le plus défavorable**

-6,6

-11,0

-23,3

Scénario de référence

-25,0

* L e second tour inclut les effets de contagion entre secteurs. ** Dans ce scénario, les chocs de transition – lorsque les investisseurs se désengagent des actifs des entreprises à forte intensité carbone – sont amplifiés par d’autres chocs macroéconomiques.

2 Données et expertises Comment quantifier au mieux les incidences liées à la durabilité ? « Celles-ci peuvent s’exprimer de bien des manières, explique Sacha Reverdiau, membre du conseil d’administration de l’Association luxembourgeoise du risk management (Alrim). Les risques physiques liés aux incidences climatiques ou environnementales sont sans doute aujourd’hui les plus tangibles.

Pour d’autres, cela peut s’avérer plus complexe. Le risque de durabilité dépasse largement les seuls enjeux climatiques.

Ses sous-composantes sont multiples : elles touchent à l’exploitation des ressources

naturelles, comme l’eau et la biodiversité, mais aussi aux aspects sociaux ou encore à la réputation de l’entreprise, avec les menaces de greenwashing. » Le représentant de l’Alrim cite deux grands défis : d’une part, la nécessité d’acquérir, voire de développer, de nouvelles expertises ; d’autre part, la disponibilité des données. « Vis-à-vis des risques purement financiers, nous disposons d’un volume de données historiques conséquent et d’un accès public. La disponibilité des données relatives au risque de durabilité est, en revanche, loin d’être aussi exhaustive.

Nous avançons par étapes, en nous appuyant sur diverses sources d’information, avec une attention particulière portée à leur qualité. »

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3 Régulation en mouvement Une meilleure prise en compte du risque climatique, de transition et, plus largement, de durabilité, est soutenue par un renforcement de la réglementation. L’adoption de plusieurs textes a obligé les entreprises à rendre compte de leurs performances extrafinancières (notamment avec la généralisation de la CSRD ou l’adoption de la taxonomie verte) et à garantir une plus grande transparence en matière d’investissement durable (SFDR et Mifid). « Le régulateur, soucieux de protéger l’investisseur face à de nouveaux risques, mais aussi de prévenir des risques systémiques, exige également des acteurs de l’écosystème financier qu’ils opèrent un suivi rigoureux des risques de durabilité », explique Alexandre Dias.

C’est l’objet de la circulaire 21/773 de la CSSF, applicable aux établissements de crédit, et, pour l’ensemble des acteurs, du document Priorités de supervision de la CSSF en matière de finance durable. Ces textes définissent actuellement ce qui est attendu de chacun à ce sujet. « Le régulateur attend des entités supervisées qu’elles mettent en place un cadre de gestion des risques adapté, doté de l’expertise requise et d’une gouvernance adéquate.

Elles doivent également être

en mesure de rendre compte des risques identifiés au regard des objectifs poursuivis », précise Sacha Reverdiau. Du côté des sociétés de gestion, ces exigences semblent globalement bien prises en considération, comme l’indique un rapport de la CSSF publié le 30 septembre, bien qu’il subsiste des leviers d’amélioration.

Récemment, l’Autorité bancaire européenne (EBA) a publié de nouvelles guidelines en matière de gestion des risques environnementaux, sociaux

et de gouvernance. « Les établissements sous la supervision directe de l’EBA devront s’y conformer dès 2026, reprend Alexandre Dias. Pour les autres, la CSSF vient de finaliser une consultation des acteurs du marché en vue de définir sous quelle forme elle pourrait traduire ces nouvelles exigences au niveau national. Les évolutions réglementaires attendues doivent contribuer à une normalisation des approches de gestion des risques. »

« Difficile d’établir des règles précises applicables à l’ensemble des acteurs. » Sacha Reverdiau, Alrim

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10 ans

L’EBA recommande aux institutions financières de gérer les risques ESG avec un horizon d’au moins dix ans.

4 Harmoniser la gestion des risques Jusqu’à présent, le régulateur a privilégié une approche basée sur des principes. Au regard de la diversité des risques de durabilité, l’autorité luxembourgeoise exige avant tout des entités supervisées qu’elles démontrent leur capacité à identifier, évaluer et suivre les risques correspondant à leurs activités.

Pour Sacha Reverdiau, si la réglementation doit évoluer, c’est dans une optique d’harmonisation des pratiques, afin de pouvoir comparer plus efficacement l’exposition au risque. « En la matière, il est difficile d’établir des règles précises applicables à l’ensemble des acteurs. Au regard de la diversité des cas de figure, ce serait même dangereux. »

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5 Stress tests : anticiper demain Le risque systémique lié à la gestion des risques climatiques ou de durabilité est lui aussi mieux pris en considération.

Ainsi, la Banque centrale européenne et les autorités de supervision ont soumis le secteur bancaire à un stress test inédit, centré sur les risques liés à la transition climatique. L’exercice s’inscrit dans le cadre du package Fit-for-55, qui engage l’Union européenne à réduire ses émissions de gaz à effet de serre de 55% d’ici 2030 et à atteindre la neutralité carbone en 2050. L’objectif est de mesurer la résilience des banques et leur capacité à continuer de financer l’économie dans un contexte de transition accélérée.

L’analyse couvre la période 2023-2030 et repose sur trois scénarios. Le premier scénario adverse, baptisé « Run on Brown », simule une chute brutale de la valeur des actifs carbonés. Le second combine ce choc de transition avec une dégradation macroéconomique sévère, alimentée par des tensions géopolitiques et un ralentissement économique.

Selon les résultats, les banques européennes pourraient subir des pertes comprises entre 5,8% et 11% de leurs expositions. Malgré ces chocs, le système bancaire

européen apparaît solide. Son niveau élevé de capitalisation et sa forte liquidité lui permettent de résister même dans les scénarios les plus défavorables.

Ce stress test confirme que les banques ont les moyens de soutenir la transition verte, mais il met en lumière l’importance d’intégrer pleinement les risques ESG. « Au regard de l’amplification des risques environnementaux, sociaux et de gouvernance, il est normal que les autorités y portent une attention accrue, explique Sacha Reverdiau.

Ces exercices, au-delà du cadre de gestion des risques mis en place, sont des outils essentiels pour approcher le risque. En tant que gestionnaire, il est en effet important, quand cela s’avère pertinent, de nous exposer à divers scénarios afin d’évaluer l’impact, anticiper les risques et, le cas échéant, prendre les mesures appropriées. » Gérer les risques, plus que jamais, c’est anticiper.

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Radar

ESG FINANCE

Luxembourg has made sustainable finance a core pillar of its financial centre’s development and diversification. This strategy has shown results in both investment funds and green bonds.

Guillaume Meyer, Journalist

1

Luxembourg

2

London

Luxembourg’s share of European and global ESG investment funds remained significant in 2024: World

50%

Europe*

“[Luxembourg] hosts over 50% of the global assets under management in microfinance investment vehicles.”

Luxembourg

Luxembourg

37.9 %

42.2 %

3

Oslo

4

Zurich

5

Geneva

6

Singapore

*Refers to the full European region, not just the EU.

7

Copenhagen

8

Amsterdam

The Luxembourg Green Exchange (LGX) has come a long way since its groundbreaking launch in September 2016:

9

New York

10

Los Angeles

EY Luxembourg

Green bonds

113 1,168 Issuers

25

230 Countries

* When also considering other areas of competitiveness (infrastructure, human capital, business), Luxembourg ranks 9th in this April 2025 ranking of green finance activity across 95 global financial centres.

2016

19

2025*

47 0

50

*As of 31 July 2025

100

150

200

250

1100

1150

Sources: Global Green Finance Index 15, PWC, based on LSEG Lipper and Monterey Insight, LuxSE

Luxembourg ranks first globally in green finance activity when measured solely by sustainability criteria:*

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PAPERJAM — EXTRA

042

Formation : l’ère de l’ESG pour tous

Longtemps considéré comme un plus, l’ESG s’impose désormais comme une composante centrale de la finance.

Sous la pression des régulateurs, mais aussi des investisseurs et des clients, le Luxembourg accélère sa mutation.

Aucun pan du capital humain n’échappe à cette transition.

Audrey Somnard, Journaliste Jan Hanrion, Photographe

Aurélie Ederlé Société Générale Luxembourg

11.2025

043

Il y a cinq ans encore, les formations ESG proposées au Luxembourg s’adressaient surtout à des pionniers ou à quelques convaincus.

Aujourd’hui, elles sont devenues incontournables. « Nous avons dépassé le stade de la simple sensibilisation », résume la CEO de la House of Training Luxembourg, Muriel Morbé. « Les formations vont beaucoup plus en profondeur, qu’il s’agisse de dirigeants qui doivent définir une stratégie ESG et l’intégrer dans la gouvernance, ou de métiers opérationnels comme le private banking, le portfolio management ou le risk management. » Les chiffres parlent d’eux-mêmes.

Entre 2020 et 2025, près de 5.800 inscriptions ont été enregistrées aux formations en compétences durables, contre seulement 260 en 2020. L’offre a suivi la même progression : de 60 modules en 2023, elle est passée à 109 en 2025 et atteindra 135 dès 2026. La durabilité s’invite partout, jusqu’au mini MBA de la House of Training, « désormais structuré autour de ce fil rouge ». Cette transformation traduit un basculement : « Tous les profils professionnels doivent désormais avoir des compétences ESG. Il est devenu très difficile d’exercer un métier de la finance sans elles », poursuit Muriel Morbé. L’ESG devient ainsi une compétence transversale, au même titre que le reporting, la conformité ou la gestion des risques.

« La compétence ESG [devient une] nécessité stratégique. »

L’ESG, socle commun et atout différenciant Société Générale Luxembourg illustre cette volonté d’embarquer l’ensemble des collaborateurs. Le groupe a lancé un plan global d’acculturation et de formation ESG, avec pour ambition de créer un socle commun de connaissances, puis de développer des expertises adaptées à chaque

ESG FINANCE

métier. Aujourd’hui, 93% des collaborateurs ont déjà suivi au moins une formation RSE. Le parcours débute dès l’intégration : chaque nouvel arrivant suit la « Fresque du climat », avant d’accéder à un catalogue de plus de 150 modules internes et externes.

Ces modules couvrent six grands thèmes : bases de la RSE, risques ESG, transition écologique, numérique responsable, finance durable et gouvernance sociale. « La maîtrise des cadres réglementaires (CSRD, SFDR, TCFD), la capacité à fiabiliser les données ESG et à articuler durabilité et performance économique deviennent des compétences clés », souligne la directrice des ressources humaines, Aurélie Ederlé. Pour l’institution, l’ESG n’est plus un complément mais « un socle du métier de banquier ».

Sa maîtrise sera bientôt une nécessité stratégique pour conseiller les clients avec crédibilité.

Une transformation culturelle en profondeur À la Banque Raiffeisen, le constat est similaire mais l’accent est mis sur la dimension culturelle. « L’ESG ne doit pas être considéré comme un domaine réservé à quelques spécialistes, mais comme une culture partagée au sein de la banque », insiste le membre du comité de direction Georges Heinrich. Plus qu’une compétence technique, il s’agit d’un réflexe quotidien.

La pédagogie auprès des clients devient ici essentielle. Pour beaucoup, l’ESG se matérialise avant tout par une avalanche d’obligations de transparence. Le rôle des conseillers est alors de donner du sens à ces informations, de les traduire en projets concrets et de montrer comment elles peuvent créer de la valeur. Cela passe par un accompagnement dans les démarches

PAPERJAM — EXTRA

Les profils ESG de demain La Place se prépare à recruter des profils hybrides : analystes de risques ESG, experts en données extra-financières, responsables de conformité, mais aussi conseillers capables d’intégrer la durabilité dans la relation client. L’ESG n’est plus réservé aux spécialistes : il irrigue désormais gouvernance, métiers opérationnels et stratégie commerciale. Les institutions s’accordent : la compétence ESG deviendra bientôt un socle incontournable, au même titre que la finance traditionnelle.

044

ESG FINANCE

administratives ou l’accès aux subventions publiques. « Les formations sont essentielles car elles outillent nos commerciaux pour aider les clients à transformer la complexité réglementaire en opportunité », explique Georges Heinrich.

Là encore, la banque investit fortement dans la formation de ses équipes. Elle propose des parcours spécifiques dans le domaine de la gestion des risques ESG, qui permettent d’identifier de nouvelles typologies de risques et de mieux les maîtriser. La priorité reste le renforcement des compétences internes : « L’assimilation des exigences réglementaires mobilise beaucoup de temps, mais elle doit s’accompagner d’une compréhension stratégique et commerciale. » Pour Raiffeisen, l’ESG est une transformation culturelle avant d’être réglementaire. Elle suppose de l’agilité, de l’innovation et une communication transparente, afin d’éviter que le sujet ne soit perçu uniquement comme une contrainte.

de la House of Training, « ce n’est plus seulement une question de techniciens : les administrateurs et dirigeants doivent également être formés ».

Face à une telle demande, le marché de la formation reste sous tension. « Tous nos formateurs sont externes et issus du terrain », précise Muriel Morbé. « Le réseau est restreint et très sollicité. » La House of Training mise donc sur une offre en constante évolution, construite avec l’ABBL, la House of Sustainability et des experts sectoriels. L’idée est de rester agile face à des compétences qui peuvent évoluer en quelques années, au gré des innovations technologiques et des nouvelles réglementations.

En quelques années, l’ESG est passé d’un sujet périphérique à la colonne vertébrale de la Place. À l’avenir, la compétitivité et l’attractivité du Luxembourg dépendront largement de sa capacité à disposer de talents capables d’articuler performance économique et impact durable.

Une transformation culturelle, technique et stratégique à laquelle aucun acteur ne peut échapper.

Vers des profils hybrides et stratégiques La montée en compétence actuelle ne vise pas seulement à combler des lacunes immédiates : elle dessine aussi les contours des métiers de demain (voir encadré). « La véritable demande portera sur des profils hybrides », anticipe Georges Heinrich.

Même logique pour Société Générale : d’ici trois à cinq ans, « la compétence ESG passera du statut de spécialité à celui de nécessité stratégique ».

La gouvernance est elle aussi concernée. Les conseils d’administration et les directions générales doivent renforcer leur expertise pour orienter les stratégies, assurer la crédibilité des rapports extra-financiers et répondre aux attentes des investisseurs institutionnels. Pour la CEO

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046

Conversation with François Koulischer and Michael Halling

How Luxembourg put sustainable finance on the academic map

Audrey Somnard, Journalist Julian Pierrot, Photographer

Formerly a niche area, sustainable finance has grown into a recognised research field.

Professors François Koulischer and Michael Halling discuss how the chair at the University of Luxembourg has evolved, what it has achieved and what the future may hold.

11.2025

The sustainable finance chair Launched in 2020 at the University of Luxembourg’s faculty of law, economics and finance, the chair in sustainable finance is the first of its kind in the country. It develops research and training at the intersection of finance and sustainability, exploring how investment decisions can integrate environmental, social and governance factors. The chair also aims to foster dialogue between academia, regulators and the financial sector.

047

Looking back, what are the main achievements of the chair over the past five years?

Michael Halling: We’ve worked on three fronts: research, teaching and outreach. On the research side, François and I have presented papers at leading international conferences and published in respected journals.

The chair has also given us the resources to invest in unique datasets. We’ve acquired data on biodiversity and nature, which allows us to broaden our research agenda beyond the classic ESG themes.

Having access to this kind of information is essential for producing rigorous academic work.

Another flagship achievement has been our annual international conference. For four years now, we’ve been bringing leading academics from places like the University of Chicago, Columbia Business School and Yale to Luxembourg. That matters for visibility: people in the global academic community now know that Luxembourg has a centre for sustainable finance research.

François Koulischer: And the conference has always had a dual dimension. There’s a purely academic part, but we also organise public keynotes in the evening. It has been a way to bridge academic research with the financial community and the public in Luxembourg.

Luxembourg had no academic tradition in this field before.

How has the chair changed that?

M.H.: Globally, sustainable finance has moved from niche to mainstream over the past decade. Luxembourg joined this shift at the right moment. The chair didn’t only create research within our group, it also sent a signal to colleagues across the department.

Today, we see more and more people

ESG FINANCE

working on related topics. Some of our colleagues have even obtained grants specifically to study aspects of sustainable finance.

F.K.: Yes, I see the chair as a research group within the Department of Finance. Universities often have subgroups, macroeconomics, banking, etc. Now we also have sustainable finance. The resources of the chair are shared with everyone: students and colleagues use the data, even if they are not directly affiliated. It’s a common good. For us, that has been crucial. Organising a conference or buying large datasets requires significant resources. With the support of ministries and the financial community, we’ve been able to provide these tools not just for ourselves but for the whole department.

Teaching was part of your mission as well. What progress have you made there?

M.H.: Since 2020 we’ve offered a dedicated track in sustainable finance.

Students can now spend a full semester focused on the topic. That’s still rare: many universities have introduced electives or modules, but very few have committed to an entire track.

Luxembourg has had it for five years already.

F.K.: The number of students is smaller than in the traditional finance courses, but their motivation is impressive.

They often come from diverse backgrounds, sometimes with training in natural sciences or development studies. That diversity enriches classroom debates and, ultimately, the finance profession.

Are students enthusiastic about specialising in sustainable finance?

M.H.: The expected answer would be yes, young people are passionate about sustainability. But the reality

048

“ The so-called backlash has been more noise than substance.”

Michael Halling

Evolution of ESG vs non-ESG fund performance in Luxembourg

Luxembourg Ucits (2022–24): ESG funds showed higher returns than non-ESG peers.

Average performance (%) 10

8,8

5

5

0

-5

-10

-10

-15 -15,6

-20

H1- 2022

H2- 2022

ESG funds

H1- 2023

non-ESG funds

H2- 2023

H1- 2024

is a bit more nuanced. Many students see sustainable finance as a niche, and they fear specialising too early might limit their options. But sustainability is a dimension that cuts across the entire financial industry, which is actively looking for graduates with these skills.

F.K.: What I enjoy most when teaching these courses is the curiosity of the students. Even if the numbers are smaller, those who choose the track are deeply engaged. For me, that makes teaching especially rewarding.

M.H.: And we’ve also had success in placements. Some of our students have gone into public institutions, where there is strong demand for expertise in sustainable finance.

That’s encouraging for the future.

The USA has recently seen political backlash against ESG. Does this affect your work?

M.H.: Some of our colleagues in the US tell us they hesitate to use terms like “sustainable” or “ESG” in their paper titles, just to avoid controversy. But in reality, they’re still doing the same research. From my perspective, the so-called backlash has been more noise than substance. Maybe it reflects a correction: reducing bureaucracy, trimming ineffective initiatives. That’s not necessarily bad. But the fundamentals remain intact. Climate change is not going away, and the need for research on these issues is stronger than ever.

F.K.: Exactly. Climate change is a fact, not an opinion, and it remains an underlying driver for sustainable finance. Another driver of the growth in research in sustainable finance is data. Today we have far more information on firms--emissions, governance, social practices--than ever before. It’s natural that finance as a discipline should study these dimensions.

Source : LSFI and PWC, “Sustainable Finance in Luxembourg 2024: a Maturing Ecosystem” (July 2024).

PAPERJAM — EXTRA

11.2025

049

M.H.: And that’s why I believe sustainability will become mainstream. In the future, thinking about emissions, employee treatment or supply chain impact will be as normal as analysing profitability. It won’t be a niche; it will be standard finance.

The weight of ESG funds in Luxembourg In the first half of 2024, ESG Ucits represented 73.3% of total fund assets under management (€3.25trn out of €4.43trn) in Luxembourg, according to a 2024 study

by LSFI and PWC (“Sustainable Finance in Luxembourg 2024: a Maturing Ecosystem”). ESG funds have rebounded strongly since late 2022, with net inflows of €4.8bn in early 2024. While retail investors drove most of these inflows, institutional investors remained more cautious, partly redirecting capital to private markets.

What role has Luxembourg played in this evolution?

F.K.: Luxembourg was visionary in establishing this chair back in 2018.

At that time, sustainable finance as a research field was still in its infancy.

By investing early, Luxembourg signalled that this was an important direction for both academia and industry.

M.H.: And Luxembourg is a small ecosystem, but very powerful in finance.

Having close ties with ministries, associations and financial institutions has been a big advantage. Over five years, we’ve built strong relationships.

That visibility is a success in itself.

What are your plans for the future?

M.H.: Outreach will remain a priority, especially our annual July conference.

It has become a fixture on the international calendar. Around 70–80 people attend regularly, and researchers now plan their submissions knowing that Luxembourg hosts a high-quality event every year. That reputation is valuable, and we want to strengthen it further. On the teaching side, we are considering expanding our offering, perhaps even creating a full master’s in sustainable finance. That would be a natural next step.

F.K.: For us, the long-term perspective is essential. Academic research doesn’t operate on a one-year cycle.

A single project can take five years.

Building a field takes even longer.

We value the fact that Luxembourg has supported us with this long-term horizon.

ESG FINANCE

To conclude, what stood out at your most recent conference?

M.H.: The theme was the macroeconomic impact of climate change, in particular, on public finances. We had outstanding keynote speakers, including Adair Morse from UC Berkeley, who also served at the US Treasury, and Lint Barrage from ETH Zurich. We also held a practitioner panel with representatives from the European Stability Mechanism and the European Investment Bank. It was a perfect example of what we try to achieve: top academic research combined with discussion among policymakers and practitioners.

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052

Conversation with Laetitia Hamon

Transition finance takes centre stage at LuxSE

Guillaume Meyer, Journalist Jan Hanrion, Photographer

Laetitia Hamon, head of operations and sustainable finance at the Luxembourg Stock Exchange, explains why transition bonds matter, how they can coexist with green bonds and how LuxSE aims to boost transparency and issuer accountability in a fast-evolving market.

11.2025

Green vs transition Green bonds are use-of-proceeds instruments, with funds tied to clearly identified projects such as renewable energy or energy efficiency. Transition bonds, in contrast, have no official status under international standards such as the ICMA’s Green Bond Principles.

Emerging from market practice, notably in Japan, they seek to finance emission-reduction pathways in sectors that are harder to decarbonise.

053

There is an active debate in the market at the moment about whether a dedicated label is needed for transition bonds. What is your view?

At present, the International Capital Market Association (ICMA) has not issued principles for transition bonds.

That may change very soon--everyone is watching to see what emerges from the ICMA’s annual conference in Japan in early November.

What matters is that instruments exist to finance the transition, not only assets that are already “green”. Some companies, especially those in hardto-abate sectors such as cement or chemicals, need credible pathways to decarbonise. Purpose-built instruments help clarify how that transition will happen.

But we must progress carefully.

Without clear definitions, transition bonds could quickly become a vehicle for greenwashing. Precision is crucial.

How do you assess the rise of transition bonds? Can they coexist with green bonds, or do they risk diluting ambition?

I see them as complementary, provided the objectives are explicit. With transition bonds, what is critical is not only the use of proceeds but also whether the issuer has a genuine climate transition strategy.

In the case of a green bond, investors may look at the issuer’s broader approach, but it is not a requirement.

For a transition bond, it is essential: investors must know whether the company is serious, whether it has a credible roadmap and clear milestones.

Given the scale of financing required, green bonds alone will not suffice. Transition bonds can fill part of that gap--but only if they are underpinned by ambitious climate targets, robust key performance indicators and full transparency for investors.

ESG FINANCE

What role does the Luxembourg Green Exchange (LGX) play in promoting transparency and credibility in this market?

Transparency is our core mission.

To be precise, we set stringent disclosure standards. We do not declare that one bond is “better” than another; rather, we ensure issuers publish sufficient information for investors to make informed decisions. If they fail to meet our requirements, their bonds will not be displayed on the LGX. Our role is to bring clarity and credibility to the market. But the LGX is more than a listing platform. In May 2020, we launched the LGX Academy to train market participants in sustainable bond issuance. We work with future issuers, corporate funding teams and even government ministries preparing sovereign issues.

We share guidance and case studies, which builds knowledge, supports credible issuance and strengthens the entire market ecosystem.

In September 2020, we added the LGX Datahub--a database that goes beyond Luxembourg and covers over 22,000 sustainable bonds listed worldwide. It allows investors and asset managers to filter instruments, track portfolios and prepare impact reporting. In short, it improves transparency and accessibility, helping the market to scale.

In numerical terms, what do transition bonds represent for the LGX today compared to green bonds?

At this stage, we cannot say, because there is no recognised “transition” label. I could tell you how many bonds finance specific projects, but we don’t categorise them as transition or not.

Without a market standard, we won’t invent our own classification.

That said, the LGX Datahub does capture issuer self-reporting.

PAPERJAM — EXTRA

054

ESG FINANCE

A broader remit at LuxSE

Since September, we have added a “transition” filter so users can see which bonds issuers themselves describe as such. But that remains a very small number. If you broaden the lens to instruments that clearly support transition--whether through green bonds or sustainability-linked bonds (SLBs)--the picture is far larger.

We started with the roughly 500 non-financial corporates listed on our exchange, looking at how they are managing their transition. The goal is not only to support them in issuing green or transition bonds, but also to encourage credible, ambitious strategies that align with climate goals.

In short, we are moving from a focus on “green” to a broader focus on “transition”. That is a much bigger shift for us--and one that reflects where the entire market is heading.

Since July, Laetitia Hamon has combined her role as head of sustainable finance with that of head of operations at the Luxembourg Stock Exchange.

In addition to leading the LGX team, she now oversees listing functions, including admissions and prospectus approvals. “The aim is to embed LGX more firmly within the exchange’s core activities, creating stronger synergies across the institution.”

“ Until now, the LGX focused on instruments without deeply assessing issuers.”

What role do SLBs play alongside green bonds in financing the transition?

They are highly relevant. Unlike green bonds, SLBs are not tied to specific projects. Instead, the issuer commits to targets--say, cutting emissions by 20% by 2030. If they miss, there is a financial consequence, typically a coupon step-up.

That mechanism ties the company’s cost of capital to its climate performance. It provides a powerful incentive, and it makes SLBs an important complement to green bonds in driving the transition.

Looking ahead to 2030, how do you see LuxSE’s role in sustainable finance evolving?

Next year marks the 10 th anniversary of the LGX platform, so we are reflecting on our future. Our aim is to consolidate our role as a pioneer and maintain leadership, while adapting to a constantly evolving market. That means staying proactive--creating new services, expanding geographically and using the LGX Academy to support capacity-building in emerging markets that urgently need it.

We also made a strategic shift this summer with the Luxembourg Stock Exchange Transition Finance Gateway.

Until now, the LGX focused on instruments--green bonds above all--without deeply assessing issuers. But it is increasingly important to examine the companies themselves.

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056

Defence and ESG: a marriage of reason Economist Bruno Colmant formerly led ING Luxembourg, the Brussels Stock Exchange and Degroof Petercam.

Luxembourg faces the challenge of aligning sustainable finance goals with European rearmament, aiming to prove that defence investment can coexist with transparency and responsible governance.

Guillaume Meyer, Journalist Maurice Jaccard, Photographer

The finance ministry makes no secret of it: European rearmament represents an opportunity for Luxembourg’s financial centre.

“To meet the ambitions set out in the ReArm Europe plan, it will be essential to mobilise not only public but also private financing,” the department of finance minister Gilles Roth has declared. “The Luxembourg financial centre, with its expertise and toolbox, clearly has a role to play in this context. We are also seeing that more and more players are seizing these opportunities, with, for example, the launch of specialised investment funds.”

A sensitive question remains: Luxembourg also aspires to be the EU’s green financial centre. Yet is defence, designed to destroy, not by

11.2025

€800bn The amount the EU intends to mobilise under the ReArm Europe plan, also known as “Readiness 2030,” to finance a massive increase in defence spending.

Ineligible for green bonds A green bond does not finance defence.

This is the position adopted by the International Capital Market Association (ICMA), followed by the Luxembourg Stock Exchange.

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definition the antithesis of sustainability? “ESG and defence are not necessarily mutually exclusive, since without peace and security no economic development is possible,” replies the ministry of finance. “In this context, it is nevertheless important to ensure the necessary transparency in the interest of investors.”

Defence finance needs definition Private-sector players share this view.

“Defence and ESG are compatible as responsible ESG can align with security, defence and international treaties,” says Octavie Dexant, CEO of Axa Luxembourg and Axa Wealth Europe. “Defence financing needs are not comparable in any way to ESG investments needs, which are far bigger and at much longer term.”

The Luxembourg Bankers’ Association (ABBL) stresses that defence financing remains primarily a public responsibility. “Before banks can increase their engagement, EU authorities must deliver clear political signals affirming that defence is a legitimate and priority area for financing,” the bankers’ association underlines. “The banking sector is ready to play its part by facilitating dialogue with public authorities and industry, and by distinguishing clearly between financing (credit and capital markets) and investing (risk capital).

While there is no structural shortage of bank financing, regulatory and definitional clarity could improve efficiency.” The ABBL also recommends harmonising definitions and credit analysis criteria at EU level.

Serge Weyland, CEO of the Luxembourg Fund Association (Alfi), emphasises the importance of transparency. “It is crucial to explain clearly to the investor, through disclosure, what product is being offered and to guarantee its consistency with what

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was promised.” For him, the compatibility between defence and ESG is above all a political issue and depends on each investor’s strategy. Some will rule out defence outright, while others will consider investment in protective systems necessary “to secure a future for our children.” But the boundary between defensive and offensive remains blurred and requires rigorous ESG screening processes.

Limited reputational risk For economist and former banker Bruno Colmant, Luxembourg’s trajectory makes its interest in defence funds logical. “The country has already changed its economic model several times since the Second World War,” he recalls, and its position as a global hub for asset management “naturally leads it towards this type of investment.”

Some fear that such funds could cloud the message of sustainable finance. But Colmant considers both issues “existential in nature.” In other words, security and sustainability are not incompatible, even if they appear contradictory.

According to him, reputational risk is limited as long as clear and shared governance is put in place. “If the rules are lucid, intelligent and accepted by investors and other countries, Luxembourg could even benefit. And, ultimately, it is better to have one financial centre that can stabilise, concentrate and provide transparent governance for this type of investment, rather than dozens of scattered initiatives across Europe.”

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AI-powered tools to boost ESG reporting

Conversation with Nasir Zubairi

Lydia Linna, Journalist Julian Pierrot, Photographer

A newly launched interdisciplinary research programme aims to use artificial intelligence to transform the way financial institutions handle ESG data. Lhoft CEO Nasir Zubairi explains the goals of the project and how tech can help advance sustainability ambitions.

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The project at a glance The Lhoft/SNT research project has four themes: advanced ESG data acquisition, automated regulatory compliance, predictive ESG analytics and scenario testing for sustainability.

The goal is to deliver practical AI solutions that satisfy compliance demands and advance broader sustainability objectives.

The Luxembourg House of Financial Technology (Lhoft) in July announced that it had initiated a research programme with the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust (SNT).

Could you tell us more about the project?

The programme has two main strands.

The first focuses on developing an AI-powered tool to simplify and strengthen ESG reporting. The second uses simulation research to understand how ESG practices influence financial performance. Together, we are addressing four major challenges: acquiring reliable ESG data, navigating complex and evolving regulation, reducing the high cost of compliance, and better quantifying the financial materiality of sustainability strategies.

The first pillar of this research project concerns advanced ESG data acquisition. Past reports from the Luxembourg Sustainable Finance Initiative (LSFI) have highlighted challenges related to obtaining reliable and consistent ESG-related data, such as lack of transparency, cost issues and regulatory complexity.

How can this Lhoft/SNT research project help tackle these data-related issues?

By combining generative AI with advanced retrieval and validation methods, we hope the tool we create will help institutions locate, interpret and structure ESG data in line with regulatory standards. It will seek to clarify obligations, check the consistency of disclosures and align outputs with frameworks such as CSRD and SFDR. In short, it directly addresses the data-related challenges highlighted by the LSFI.

More broadly, how can fintechs tackle ESG data-related issues in the field of sustainable finance?

Fintechs bring agility and technical innovation to complex challenges.

They can automate data collection, use AI to identify gaps and prevent greenwashing, and apply blockchain to create auditable, tamper-resistant records. These solutions help transform ESG reporting from a compliance burden into a driver of trust and value.

Could you share some examples of fintechs that are driving ESG transformation?

The Lhoft’s Catapult: Green Fintech programme is a good barometer.

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“ Sustainability is not just a financial challenge. ”

Pioneering green fintechs The startups that presented their solutions as part of the second edition of Catapult: Green Fintech are Carbonable, Doland, Dunya Analytics, Fidata Limited, Generation Impact Global, i-ESG, Kanop, Penomo, Sponsor and Zero13.

These ten fintechs pitched their solutions at the Lhoft’s Fintech Friday event on 19 September, after which Sponsor was announced as the winner. Led by CEO Michael Grimm, Sponsor aims to provide advisory and AI-driven tools to help boost climate mitigation projects.

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Some examples from the 2024 cohort: ClimateAligned, the programme’s winner, is building portfolio-alignment and transition-finance tooling for financial institutions; InvestConservation advances nature-positive finance through traceable biodiversity outcomes; Carbify provides near-real-time carbon data infrastructure; Datia streamlines investor ESG and CSRD workflows; Metricsat applies satellite analytics for environmental monitoring; Impact Scope brings carbon intelligence for digital-asset markets; and Connect Earth delivers transaction-level emissions insights. The programme is sponsored by the ministry of finance, and we work very closely with the LSFI and other stakeholders to help the participating firms integrate into Luxembourg’s ecosystem. We’re equally excited about the new cohort that began on 15 September.

sustainability reporting. I also feel tokenisation has a key role to play in advancing the market for sustainability-related assets such as green bonds.

The use of artificial intelligence and AI-powered tools is often seen as a way to increase automation and efficiency in the financial industry.

Are you already seeing some cases where AI is used to help financial institutions address challenges related to sustainability?

Yes. AI is already being used to analyse sustainability disclosures, extract key indicators and flag compliance gaps.

What about blockchain and digital ledger technology (DLT)? Can these kinds of tech help financial institutions satisfy the need to comply with sustainability regulation?

Blockchain and DLT can play a powerful role. They provide immutable records and verifiable audit trails, particularly useful in areas like carbon credits, green bonds and supply chain provenance. This ensures transparency, reliability and trust in

The Lhoft/SNT research project will be “interdisciplinary,” as University of Luxembourg professor Radu State explains, “bringing together multiple stakeholders ranging from finance, computer science and sustainability.” Why was it important to bring together so many different perspectives?

Sustainability is not just a financial challenge. It spans regulation, technology and societal priorities. By bringing together finance professionals, computer scientists and sustainability experts, we ensure that the solutions are credible, practical and aligned with real-world needs.

How many people are involved in this research project, how long will it last and what concrete solutions do you hope it will produce?

This is a multi-year collaboration, with several researchers at the SNT involved, alongside steering from the Lhoft and the LSFI, and the support of the Luxembourg Green Exchange. We are also looking to add more stakeholders from financial services to help shape the solution and ensure it is just right. The programme, at this early stage, has already delivered a first version of an AI-powered co-pilot for ESG reporting. Over the next phases of the programme, a key objective is to further enhance this generative AI tool and develop a simulation framework to model the financial impact of ESG strategies. Together, we hope these outputs will help Luxembourg remain at the forefront of sustainable finance through practical, applicable innovation.

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Transparency battle in market for ESG ratings ESG ratings remain fragmented, with no common definition and widespread risks of data manipulation.

From 2026, Esma oversight promises transparency and independence, while AI offers promise but cannot replace human judgement.

Sylvain Barrette/Guillaume Meyer, Journalists

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Why is it so difficult to define what an ESG rating actually measures?

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How do regulatory blind spots enable ESG data manipulation?

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Why is Esma’s direct supervision of ESG raters a turning point?

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What opportunities and risks does AI bring to ESG rating analysis?

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1 ESG rating issues A significant challenge with ESG ratings lies in the absence of a clear, unified definition of what an “ESG rating” truly means or measures, making comparisons and effective use difficult.

Unlike credit ratings, which have a linear structure and common definitions such as “probability of default,” ESG ratings typically have a matrix structure due to the diverse nature of risks and user preferences, according to Svetlana Grishankova, an independent sustainability advisor. She spent over a decade managing a boutique rating agency based in Frankfurt, specialising in credit and ESG ratings, before relocating to Luxembourg.

Grishankova believes that the most effective ESG ratings are those designed for specific user groups and purposes, such as procurement or investment decisions. Without a clear understanding of what an ESG rating measures, it is impossible to use ESG rankings. It is similar to trying to define the best car, where fuel efficiency and speed lead to very different answers, or ranking films, where the choice depends on whether one prefers drama or comedy.

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Seven major ESG raters

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Sustainable Fitch

Bond-focused, combining credit and ESG analysis

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MSCI

Index leader, integrating ESG into risk management

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LSEG/Refinitiv

Focuses on ESG data and market infrastructure

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ISS

Governance and proxy voting specialist, with strong investor influence

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EcoVadis

Supply chain approach, widely used by corporates and suppliers

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Sustainalytics

Focuses on unmanaged ESG risks; recently became part of Morningstar

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S&P

Integrates ESG scores with financial analysis and benchmarks

2 Data manipulation Current ESG regulation has significant vulnerabilities due to the absence of unified global disclosure standards, creating regulatory blind spots and allowing for “creative compliance” and data manipulation.

Grishankova observes that companies often rely on voluntary disclosure, which allows them to selectively highlight favourable information, fragment data and manipulate it through changes in units of measurement, rescaling or calculation methodologies.

A major issue is the lack of mandatory monitoring of these disclosures. Although ESG rating agencies are much better positioned to identify manipulations, they are not required to

publicly report their findings or share them with regulators, keeping critical insights within a professional circle of investors--or occasionally communicating them to journalists.

Auditors also review ESG information, but their scope is narrower, and an audit is not obligatory for every company.

Grishankova argues that a key enforcement failure is the lack of coordination and the absence of a feedback loop (cross-checks and cross-references) among companies, rating agencies, auditors and regulators. Regulators oversee rating agency methodologies and governance, but they do not receive direct feedback on findings from company reports, leaving a critical bridge missing in the system.

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Esma supervision as a game changer What sets the ESG Rating Regulation apart is that, for the first time, ESG rating providers in the EU will come under the direct supervision of the European Securities and Markets Authority (Esma).

From July 2026, providers will be obliged to disclose their methodologies, data sources and underlying assumptions.

This requirement, coupled with Esma’s oversight, represents a profound shift in how transparency and accountability are enforced. “The new Esma Regulation mandates the disclosure of ESG rating methodologies, data sources and underlying assumptions, marking a significant step toward greater transparency in the sustainable finance ecosystem,” observes Grishankova. Another crucial reform is the demand for operational separation between ESG ratings and ancillary services such as consulting or data analytics. By breaking this link, the regulation tackles potential conflicts of interest that have long undermined confidence in ratings. Under Esma’s supervision, these safeguards are no longer aspirational best practices but binding obligations, subject to European-level monitoring and enforcement.

For Grishankova, the impact is clear: “This is indeed a game

changer: it empowers investors to make more informed decisions, enhances the credibility of ESG ratings and helps mitigate potential conflicts of interest that have long plagued the industry.” By embedding transparency and independence into the regulatory framework, Esma’s role reinforces investor trust and strengthens the EU’s sustainable finance architecture.

Svetlana Grishankova

The European Commission estimates that 59 ESG rating providers will fall under Esma’s supervision in the EU from 2026.

4 AI: promise and peril The rise of artificial intelligence is often cited as a potential solution to the complexity of ESG ratings, particularly in processing vast volumes of non-financial data. Grishankova acknowledges its advantages, notably scalability and efficiency, but warns against overreliance. “AI is only as reliable as the data it ingests: garbage in, garbage out,” she stresses. When disclosures are standardised and verified, AI can indeed sharpen information gathering and analysis. Yet, in the all-too-common cases of vague or selectively framed reporting, human judgement remains indispensable. Without it, algorithms risk misinterpreting nuance or missing critical issues, undermining rather than enhancing the credibility of ESG ratings.

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Why social taxonomy deserves investor focus Social criteria in finance are underdeveloped and misunderstood--but they are growing in importance as investors seek purpose alongside profit.

Sylvain Barrette, Journalist Patricia Pitsch, Photographer

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As sustainable finance becomes mainstream, the focus on environmental impact is no longer enough.

Increasingly, investors are accounting for social factors--such as affordable housing, healthcare and gender equality--seeing them as essential for long-term value creation and systemic stability. Yet while the EU’s green taxonomy has helped channel capital into climate-related initiatives, its social counterpart remains nascent.

“Social is the next frontier,” says Isabelle Delas, CEO of Luxflag, a non-profit labelling agency based in Luxembourg. “It’s not just about doing good. There’s a competitive advantage for companies that lead on social metrics.”

Luxflag, established nearly two decades ago to label microfinance funds, now positions social investment as core to its mission. It recently co-developed an open-source social investment framework alongside the International Social Finance Accelerator (ISFA). The aim: to provide much-needed clarity and classification around what constitutes a socially impactful investment.

The main challenges Despite growing investor interest, the EU’s social taxonomy is still in draft form--and stalled. Unlike the green taxonomy, which is mandatory and widely integrated, the social taxonomy is not yet finalised nor widely adopted.

“It’s on standby mode,” Delas says, citing broader geopolitical and economic challenges that have diverted EU attention.

Another major roadblock is the absence of reliable, standardised data. Unlike environmental indicators such as CO2 emissions, social impact can be harder to quantify. “Affordable housing may be measurable,” Delas notes, “but access to clean water or

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Two major French asset managers have received Luxflag’s social impact label this year.

sanitation in remote areas--that’s far more complex.”

The consequence is a lack of coherent subcategories and exclusion frameworks, making implementation difficult for investors. Moreover, some asset managers perceive social investments as potentially lower yielding, despite evidence suggesting they offer resilience in times of crisis.

Visibility remains another issue. As Delas points out, “We are a small organisation with no communication budget.” The dominance of green finance has also overshadowed social initiatives, limiting the taxonomy’s visibility in mainstream discourse.

The role of Luxflag For Delas, social finance is not simply a box-ticking exercise. It’s a chance to redefine priorities and redirect capital

What is social taxonomy?

A regulatory framework defining what qualifies as a socially sustainable investment, covering themes like housing, education, health and equality.

Isabelle Delas is the CEO of Luxflag, a Luxembourg-based non-profit specialising in sustainability labelling.

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to areas with real-world impact.

“Social investments are still largely undiscovered,” she says. “That means opportunity.”

Luxflag’s social impact label--one of the first of its kind in Europe--aims to accelerate this shift. The framework, developed in collaboration with NGOs like ADA and Cerise+SPTF and asset managers such as Capital Group, defines key principles: intentionality, measurability, transparency and impact.

The framework breaks down investment themes into actionable sub-sectors: education, financial inclusion, clean water, gender equality and more. Already, two major French asset managers have earned the label under this framework in 2025.

Importantly, Luxflag’s label is not a rating but a classification tool designed to help investors identify opportunities and avoid pitfalls.

As the only agency offering both microfinance and social impact labelling, Luxflag is carving out a unique role in the European sustainable finance landscape.

“We don’t compete,” Delas says.

“We collaborate, we support. Our mission is to grow the market for social investment, not dominate it.”

Looking ahead, Delas is hopeful.

She envisions a future where the social taxonomy stands on equal footing with the green, aided by new technologies like satellite data. But to get there, the sector must overcome inertia and uncertainty.

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Forecast Octavie Dexant

CEO, Axa Luxembourg

The less favourable approach of the US towards ESG, as well as the evolution of priorities in Europe, is having a negative impact on the growth of ESG investment volumes in 2025. We also observe a shift in issuers: financial sector emissions are still expected to exceed 2024 volumes, while emissions from other industries are expected to decrease significantly (-34% versus last year), compensated by an increase in sovereign, subnational and agency (SSA) emissions.

However, there are many reasons to be optimistic for the future.

Transition-related investment needs remain massive, given carbon neutrality targets. The Paris Agreement is celebrating its 10 th anniversary, with many investments coming to maturity in 2025–2026, leading to high refinancing needs. European regulation is being recalibrated.

Finally, investors are not mistaken: ESG investments can be at least as high-performing as traditional products, and they reinforce portfolio resilience over the long run, as they take account of non-financial risks and exclude assets at risk of becoming stranded.

“The percentage [of Article 8 and Article 9 Ucits funds] is estimated to increase to more than 80% by 2028.”

Michael Geeroms

Senior fund manager, CapitalatWork

ESG investing means considering factors beyond financial return when analysing an investment’s performance. While most people today agree that it is a good thing to avoid companies that use child labour, or companies that avoid paying their fair share of taxes by using tax havens, developing a clear, transparent and logical framework remains a challenge.

We have always prioritised a straightforward and balanced approach in our ESG strategies, where financial return and ESG factors are both considered.

Photos : Blitz Agency/Foyer Group

“There are many reasons to be optimistic for the future.

Transition-related investment needs remain massive.”

While the subject of ESG or sustainable investing is generally less present in the press than in 2020 and 2021, implementation in the investment world continues to steam ahead, especially in Europe. At the end of 2024, an estimated 63% of Ucits funds incorporate a sustainability framework in one way or another (the Article 8 and Article 9 funds). This percentage is estimated to increase to more than 80% by 2028.

This essentially means that sustainability considerations have now become standard practice, instead of being a niche strategy.

Evaluate and seize ESG opportunities for every taste Investors are increasingly opting for ESG-compliant portfolios. Our powerful ESG & Climate reporting tools help you navigate within the rapidly evolving environment and ensure that your investors meet their goals of responsibility and returns. That’s frog power!

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