The Luxembourg Sustainable Finance Initiative (LSFI) has identified a series of urgent training gaps within the finance industry that need to be addressed over the next two years, according to a recent report. This detailed examination of current training programs has laid the groundwork for a set of approved actions, designed to strengthen sustainability practices in the industry.
Short-term training gaps - within one year - such as the marketing and selling of Environmental, Social, and Governance (ESG) products, impact investing, inclusive finance, blended capital, and sustainable governance, require immediate attention. Notably, the LSFI report emphasized transparent and ethical practices in ESG marketing, suggesting collaboration with training providers to improve existing courses and develop new ones.
“For the LSFI, it is pivotal to understand the needs and the challenges the financial industry faces to master sustainable finance and enable the transition of our economies, for us to be able to support the sector with toolkits and concrete actions effectively,” said Nicoletta Centofanti, LSFI General Manager.
The report was put together by the LSFI’s Working Group on Sustainable Finance Training and Education, composed of 12 experts from the Luxembourg financial sector, industry institutions, consulting firms, NGOs, research and sustainable finance education organisations.
“At the moment, one of these challenges is closely related to financial professionals’ education and training,” Centofanti said. “With this working group, we wanted to understand better what the newly needed skills are, where the Luxembourg sustainable finance training offering stands, what are the gaps and how we can cover them.”
Extending existing programs
Longer-term goals - one to two years - include developing fintech applications to support sustainable finance and improving the understanding of ESG ratings. LSFI will also explore extending existing programs, leveraging developed expertise to other job functions to address these needs.
In its conclusion, the report proposed a series of actions to fill the existing gaps. A critical first step involves engaging with various training providers to enhance current offerings. This will entail open discussions about the identified gaps and diversity issues and the development of new courses where necessary. Training providers are also encouraged to use the LSFI’s gap analysis matrix as a reference document for their offerings.
Industry feedback
Recognising the importance of industry feedback, the LSFI will seek conversations with CEOs of financial institutions and human resources professionals. These sessions aim to clarify the assessment, empower financial institutions to understand current sustainable finance training needs, and identify necessary skills for future employees.
To ensure the assessment’s relevance and currency, the LSFI plans regular updates from training providers on new course developments. Moreover, the working group recommended a reconvening every six months, then annually, to reassess the training offering and update needs identification.
The working group’s assessment and identified solutions aim to guide LSFI’s work in sustainable finance education and training, ultimately supporting the sector’s critical transition towards sustainability.