LGX expands to spotlight transition bonds
When the Luxembourg Green Exchange (LGX) launched in 2016, it did so with a clear mission - to bring transparency to the rapidly growing sustainable finance market, which, at the time, was made up only of green bonds.
Over the last decade, the market has continued to expand and diversify. Green bonds paved the way for social bonds, which paved the way for sustainability and sustainability-linked bonds, and the LGX Platform was right there in the centre of it all – expanding along with the market.
Fast forward to 2026 and there’s a new kid on the block going by the title of transition bonds. So, true to its history of reflecting market developments, the LGX Platform as well as the LGX DataHub and the Luxembourg Stock Exchange (LuxSE)’s Transition Finance Gateway are all expanding to facilitate the uptick in this important security type.
Transition bonds play a distinct role within sustainable finance. While green bonds typically finance projects that are already environmentally sustainable, transition bonds are often issued by companies in emissions-intensive sectors that are taking concrete steps to decarbonise but may not yet be able to finance fully green activities.
By providing capital for these transformation efforts, transition bonds help bridge the gap between today’s carbon-heavy economic structure and the low-carbon economy that our global climate goals require.
Brought to the market in 2020, the LGX DataHub is the centralised sustainable bond data of LuxSE that operates as an additional and complementary LGX service to that of the LGX Platform and serves as the reference sustainable bond data source for a number of leading institutions.
Thanks to the post issuance data available on the transition bonds included in the LGX DataHub, investors can now concretely discover how much of each bond’s proceeds have been allocated to climate transition (CT) projects – a real gamechanger when it comes to bring further transparency to this area of the market.
By making transition bond data available on the database alongside other sustainable finance instruments, investors, asset managers, analysts and market participants can more easily integrate sustainability information into their research, reporting and investment processes.
Launched in July 2025, the Transition Finance Gateway aims to support issuers in their transition journey and provide transparency to investors. The Transition Finance Gateway highlights the transition efforts of the exchange’s 500+ non-financial corporate debt issuers, regardless of whether they have brought conventional or sustainable bonds – or a mixture of both – to LuxSE.
Without this clarity, the risk of greenwashing or transition-washing can undermine confidence in the instrument.
To address this, the International Capital Market Association (ICMA) developed the Climate Transition Bond Guidelines (CTBG), which aim to promote transparency, disclosure and market integrity for transition bonds.
Why does this mean concretely? Well, under these new guidelines, CT projects are defined as assets or investments related to high-emission activities that lead to substantial and quantifiable greenhouse gas (GHG) emissions avoidance, reduction, or removal – complementing and going beyond the scope of the green projects outlined in ICMA’s GBP such as carbon capture, switching fossil fuels from coal to gas, for example among other important emission reduction projects.
Once the transition bond is displayed on the LGX Platform, our experts will also monitor the presence of post-issuance reporting, and the allocation of a meaningful proportion of the proceeds to climate transition projects – ensuring that the transition bond meets all the requirements to remain displayed on the Platform after its initial listing.
Financing credible transition pathways will be essential as the global economy moves toward net-zero emissions - particularly in sectors where decarbonisation requires significant investment, innovation and time.
By combining clear eligibility criteria, transparent disclosures and accessible data, LGX and its sustainable finance experts aim to help investors identify credible transition financing while providing issuers with a trusted platform to showcase their commitments.
For issuers developing transition financing strategies, LGX offers an opportunity to bring visibility to their transition efforts and demonstrate alignment with recognised international guidelines.
We invite issuers to showcase their transition bonds on the LGX Platform and join a growing community working to accelerate the transition to a more sustainable global economy.
Over the last decade, the market has continued to expand and diversify. Green bonds paved the way for social bonds, which paved the way for sustainability and sustainability-linked bonds, and the LGX Platform was right there in the centre of it all – expanding along with the market.
Fast forward to 2026 and there’s a new kid on the block going by the title of transition bonds. So, true to its history of reflecting market developments, the LGX Platform as well as the LGX DataHub and the Luxembourg Stock Exchange (LuxSE)’s Transition Finance Gateway are all expanding to facilitate the uptick in this important security type.
Transition bonds now accepted on the LGX Platform
Transition bonds eligible for display on the LGX Platform will now carry a dedicated transition bond flag on their individual security cards. This new identifier will help investors easily recognise bonds designed to support issuers as they implement credible climate transition strategies.Transition bonds play a distinct role within sustainable finance. While green bonds typically finance projects that are already environmentally sustainable, transition bonds are often issued by companies in emissions-intensive sectors that are taking concrete steps to decarbonise but may not yet be able to finance fully green activities.
By providing capital for these transformation efforts, transition bonds help bridge the gap between today’s carbon-heavy economic structure and the low-carbon economy that our global climate goals require.
Expanding transparency through the LGX DataHub
Transparency has always been at the heart of LGX. To further support market participants, data on transition bonds - not just displayed on the LGX Platform but throughout the world - is now also available through the LGX DataHub.Brought to the market in 2020, the LGX DataHub is the centralised sustainable bond data of LuxSE that operates as an additional and complementary LGX service to that of the LGX Platform and serves as the reference sustainable bond data source for a number of leading institutions.
Thanks to the post issuance data available on the transition bonds included in the LGX DataHub, investors can now concretely discover how much of each bond’s proceeds have been allocated to climate transition (CT) projects – a real gamechanger when it comes to bring further transparency to this area of the market.
By making transition bond data available on the database alongside other sustainable finance instruments, investors, asset managers, analysts and market participants can more easily integrate sustainability information into their research, reporting and investment processes.
Further opportunities through the Transition Finance Gateway
Adding another string to our bow when it comes to supporting the development of transition finance, we are also pleased to announce that transition bonds will also be made visible in the newly launched Bond View feature of the Transition Finance Gateway – highlighting exactly how issuers finance their climate transition via bonds listed at LuxSE.Launched in July 2025, the Transition Finance Gateway aims to support issuers in their transition journey and provide transparency to investors. The Transition Finance Gateway highlights the transition efforts of the exchange’s 500+ non-financial corporate debt issuers, regardless of whether they have brought conventional or sustainable bonds – or a mixture of both – to LuxSE.
The importance of robust transition frameworks
For transition finance to maintain credibility in the market, transparency is essential. Investors must be able to clearly understand how a transition bond contributes to an issuer’s broader decarbonisation strategy.Without this clarity, the risk of greenwashing or transition-washing can undermine confidence in the instrument.
To address this, the International Capital Market Association (ICMA) developed the Climate Transition Bond Guidelines (CTBG), which aim to promote transparency, disclosure and market integrity for transition bonds.
Understanding ICMA’s Climate Transition Bond Guidelines
Following the same core pillars as ICMA’s Green Bond Principles (GBP) with one notable addition – to be aligned with ICMA’s new CTBG, transition bonds should allocate all or a meaningful proportion of the proceeds to CT projects.Why does this mean concretely? Well, under these new guidelines, CT projects are defined as assets or investments related to high-emission activities that lead to substantial and quantifiable greenhouse gas (GHG) emissions avoidance, reduction, or removal – complementing and going beyond the scope of the green projects outlined in ICMA’s GBP such as carbon capture, switching fossil fuels from coal to gas, for example among other important emission reduction projects.
To be credible, CT projects must meet 5 safeguards:
- Fit into an existing issuer level transition strategy
- Technological and/or economic unfeasibility of low-carbon alternatives
- Alignment or compatibility with official sector or market-based taxonomies
- Mitigation of substantial and quantifiable GHG emissions beyond business-as-usual (BAU)
- Identification, analysis, best-efforts mitigation, and disclosure of carbon-lock in risks
Once the transition bond is displayed on the LGX Platform, our experts will also monitor the presence of post-issuance reporting, and the allocation of a meaningful proportion of the proceeds to climate transition projects – ensuring that the transition bond meets all the requirements to remain displayed on the Platform after its initial listing.
Supporting the next phase of sustainable finance
The introduction of transition bonds on the LGX Platform reflects the continued evolution of sustainable capital markets.Financing credible transition pathways will be essential as the global economy moves toward net-zero emissions - particularly in sectors where decarbonisation requires significant investment, innovation and time.
By combining clear eligibility criteria, transparent disclosures and accessible data, LGX and its sustainable finance experts aim to help investors identify credible transition financing while providing issuers with a trusted platform to showcase their commitments.
For issuers developing transition financing strategies, LGX offers an opportunity to bring visibility to their transition efforts and demonstrate alignment with recognised international guidelines.
We invite issuers to showcase their transition bonds on the LGX Platform and join a growing community working to accelerate the transition to a more sustainable global economy.
