Sustainable Finance
Sustainable finance is not just a trend—it’s a fundamental reshaping of how banks operate, invest, and lend. The ABBL is at the forefront of this transformation, providing thought leadership, coordination, and practical tools to help its members meet the regulatory, societal, and strategic demands of sustainability.
Climate change, environmental degradation and social crises have reinforced the role of investment and finance in building a more sustainable and inclusive society. By aligning corporate behaviour, product offerings, transparency, and risk management with ESG considerations, the ABBL is helping shape a financial sector that is sustainable by design—and credible by delivery. Our association’s efforts in sustainable finance span four major areas:
Corporate Sustainability: Fostering Responsibility from Within
Sustainability begins at the institutional level. The ABBL actively encourages its members to embed corporate sustainability principles in their governance, operations, and workforce policies, with a focus on:
Human rights and due diligence
- Assist ABBL members in understanding and preparing increasing requirements and expectations on due diligence.
- Promoting responsible value chains and ESG risk assessments across all exposures types.
Climate transition
- Supporting banks and fostering peer exchanges on the elaboration of climate transition plans.
- Promote decarbonization levers to help banks reduce the carbon footprint of their operational activities in Luxembourg.
Diversity, Equity, and Inclusion (DEI)
- Fostering diverse workplaces in the banking sector by promoting DEI principles and commitments, such as through the Women in Finance Charter.
- Sharing best practices and benchmarking initiatives that foster inclusive corporate cultures.
The ABBL serves as a platform for dialogue and knowledge exchange, reinforcing sustainability as a core business value—not just a compliance obligation.
“Sustainability begins from within—responsible governance, diverse teams, and ethical conduct are the foundations of lasting finance.”
Thomas Collin
Officer - Sustainability & CSR, ABBL
Financial Products & Services: Enabling Sustainable Choices
Financial institutions play a vital role in financing the transition to a more sustainable economy. The ABBL supports its members in developing sustainable investment and lending products by:
Investment Products
- Assisting with the interpretation and implementation of SFDR (Sustainable Finance Disclosure Regulation) related obligations for investment products.
- Clarifying the collection of clients’ sustainability preferences under MiFID II’s ESG amendments.
- Facilitating alignment with the EU Taxonomy, including client suitability and advisory obligations, and reporting.
Lending Products
- Supporting banks in structuring and promoting green loans and mortgages.
- Promoting the harmonisation of green lending standards at EU-level.
- Engaging in EU discussions on transition finance and SME sustainability lending.
The ABBL brings together banking and product specialists in dedicated working groups, ensuring a coordinated response to market demands and regulatory complexity.
Transparency & Reporting: Making Sustainability Measurable and Comparable
Sustainability reporting is central to transparency and market trust. The ABBL provides expert guidance to its members on meeting evolving disclosure obligations, including:
- CSRD (Corporate Sustainability Reporting Directive) : Supporting banks in the monitoring and implementation of sustainability reporting standards and clarifying the application of sector-agnostic indicators for banks and financial entities.
- Pillar III ESG Disclosures: Supporting banks in the integration of ESG metrics to comply with the EBA’s technical standards on prudential disclosures on ESG risks in accordance with the Capital Requirements Regulation.
- SFDR Product and Entity-Level Disclosures: Facilitating standardisation and data harmonisation across Article 6/8/9 fund classifications and providing support and peer exchanges on disclosure templates.
By promoting consistent, high-quality reporting, the ABBL strengthens both regulatory compliance and market confidence in ESG financial products.
“Clear standards and transparent reporting make sustainable finance credible—and strengthen investor trust.”
Alexandre Dias
Adviser - Sustainability, ABBL
ESG Risks: Integrating Sustainability into Risk Frameworks
Understanding and managing ESG-related risks is key to financial stability. The ABBL works closely with members and regulators to support the integration of ESG risks into enterprise risk management. Key areas of focus include:
Climate and environmental risks
- Supporting alignment with EBA Guidelines on ESG risk management.
- Encouraging the use of climate scenario analysis and portfolio stress testing.
Social and governance risks
- Raising awareness of governance and conduct risk exposure under the ESG lens.
- Promoting integration into credit, market, and reputational risk frameworks.
Supervisory expectations
- Supporting members in meeting ECB and CSSF expectations on ESG risk governance, materiality assessments, and data management.
Through workshops, technical papers, and expert-led sessions, the ABBL helps members embed sustainability as a key dimension of risk management and regulatory engagement.
