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Sustainable finance can save us from the energy crisis – with the Luxembourg Stock Exchange

A special podcast from Spotlight, the New Statesman’s policy supplement.

The need to move to a net zero economy is an urgent one. And as far back as 2021, the context for that transition has been one of additional crisis.

Alongside the ongoing climate and nature crises, turbulence in energy markets – exacerbated by Russia’s invasion of Ukraine last year – has changed the playing field, and all of these elements are interlinked.

In this special podcast, sponsored by the Luxembourg Stock Exchange (LuxSE), a panel of expert guests discusses how the energy crisis has affected the move to net zero emissions, the role of sustainable finance in the green transition, and the politics of concerted action on these existential issues.

For the podcast, host Becky Slack is joined by Laetitia Hamon, head of sustainable finance at LuxSE and Miguel Gil Tertre, chief economist at the European Commission’s Directorate-General for Energy.

“We have lived through exceptional times in 2021, 2022,” says Gil Tertre when asked about how the energy crisis developed. “We experienced weaponisation from Russia, who was the supplier of 40 per cent of our total natural gas supplies. There were very severe disruptions. There was also a lot of uncertainty in the market.”

But the crisis has had a positive impact on the green transition, he explains. “From the start our analysis showed that winding down the dependency on fossil fuels from Russia and the green deal were not contradictory… If we would’ve had more renewables in the system, the capacity of Russia to weaponise energy would have been much lower.”

Sustainable finance plays a pivotal role in strengthening global efforts to achieve net zero. Hamon, who leads the team at LuxSE’s UN-awarded Luxembourg Green Exchange (LGX), explains why the platform was founded and its role in facilitating the global reduction in carbon emissions.

Launched as a response to the 2015 Paris Agreement climate goals and the UN Sustainable Development Goals, the objective of LGX is “to shed light on sustainable securities. We want to give more transparency. We want to give more [investor] trust. And ultimately this is because we want to shift capital to finance a lower carbon and more inclusive economy.”

As of May 2023, the outstanding sustainable bonds displayed on LGX have raised around €890bn in total for sustainable projects around the world.

Listen to the episode to hear the full conversation at the top of this article.

[See also: How to combat the energy crisis and keep the green transition on track]