Delano October 2021 by Maison Moderne

No. 82

OCTOBER 2021

Luxembourg in English

Thomas Lambert : A neighbourly union The Belgian ambassador on economic ties with the grand duchy, cross-border business opportunities and military cooperation.

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Editorial #InternationalAffairs

It’s been a hell of a summer. The holidays did at least allow many Luxembourg residents the chance to travel to sunnier climes to grab some much-needed R&R for the first time since the covid pandemic struck. But the return to school has some parents worried about the potential health risk to their family as covid restrictions are relaxed in the classroom. The school holiday period itself was bookended by July’s devastating floods and August’s disastrous withdrawal from Afghanistan. Both events saw cooperation between Luxembourg and Belgium, as ambassador Thomas Lambert explains in our cover story this month. But they also highlighted serious lack of foresight locally and internationally. They also signpost a worrying future. The lessons the world has failed to learn from global warming, despite the posturing at international summits and the promises of the 2016 Paris Agreements, threaten to overwhelm the human race. In the midst of this summer, the most recent Intergovernmental Panel on Climate Change report was labelled a “code red for humanity” by the United Nations. But we carry on regardless. Rush hour traffic is once again chockablock with cars carrying only one occupant, despite lessons learned during the pandemic that some sort of remote working regime can be both efficient for the employer and satisfying for the employee. We take little note of reports like the one released in August on greenwashing at Germany’s DWS Group that make a mockery of the some of the finance industry’s claims to be ramping up ESG. As State Street’s Rick Lacaille points out in our business report on the sustainable funds sector, investors

choosing not to own shares will not shut down a company or sector. As for Afghanistan, the manner in which the occupation of the country was ended has left a disastrous early stain on the presidency of Joe Biden. Not that his predecessors, and in particular George W. Bush--who ordered the troops in, with the complicit support of UK prime minister Tony Blair--should escape censure. The human costs in both conflicts were terrible, but comparisons with the war the US waged in Vietnam, made very visible by the pictures of a US helicopter flying over the embassy in Kabul, sadly underplay the long-term impact of the Nato mission in Afghanistan and the hurried withdrawal. The wave of refugees--over 2.5 million have fled the country and some 4 million are displaced inside Afghanistan--is a humanitarian crisis that will last for years. And the disgraceful abandonment of thousands of Afghans who aided the allies will come back to haunt them. Less than 20 years after the US withdrawal from Vietnam, the country was enjoying a booming tourist trade from western visitors. It would be a miracle if that happens in Afghanistan.

Editor-in-chief, Delano digital DUNCAN ROBERTS

OCTOBER 2021

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Contents October 2021

30 Business report

Making an impact: a look at sustainable investing

06 #POLITICS - SAM TANSON

“I take this extremely seriously” –

08 #BUSINESS - MARKO KLACAR

“A turnkey solution, part of the circular economy” –

10 #FINANCE - ISABEL HØG-JENSEN

“The Nordic market is going to grow” –

12 #CULTURE - BERYL BRUCK

“We know that more needs to be protected” 14 Dashboard

MAXIME RIGGI VS RIKIYA MASUDA

Cryptocurrencies: risky business?

p. 16 Belgian ambassador Thomas Lambert on bilateral cooperation and challenges

40 Essay

514 votes that changed the world

Conversations 16 POLITICS - THOMAS LAMBERT

“It’s about the dry stuff, the little stuff, that helps people in this cross-border reality” –

44 Gusto

Go meatless! 46 Business club 50 Pick’n’mix

22 BUSINESS - ANDY BOWYER

Climate concerns “The need for more data is… increasing beyond our expectations”

Photos

Edouard Olszewski, Mike Zenari, Illustration

Marielle Voisin

Back to school, harvest and workforce figures

38 Head to head

p. 22 Kleos CEO Andy Bowyer on the Earth observation industry

p. 40 The long-term impact of Xavier Bettel’s 2011 Luxembourg City municipal elections win

OCTOBER 2021

Ristretto

Ristretto #Politics

“I take this extremely seriously” Justice minister Sam Tanson (Déi Gréng) is overseeing a raft of reforms aimed at bringing Luxembourg’s justice system up to speed amid criticism that it’s not doing enough to combat crime. New rules from 16 September aim to speed up court proceedings. What is changing? The project “Efficiency of the judiciary” is about making procedures more efficient and quicker. There are two key reforms. On the one hand, the jurisdiction of justices of the peace increases. It’s currently fixed at €10,000 and will be raised to €15,000. It’s meant for simpler cases and you don’t need to be represented by a lawyer. The other big change concerns cases that are below €100,000 at the district courts with only two parties involved. The number of written briefs will be limited, with fixed deadlines. In addition, there’s a range of procedural adjustments. The wheels of justice have a reputation of turning slowly. How does the situation in Luxembourg compare to its neighbours? There’s a document by the Council of Europe that reviews the efficiency of justice systems, and we’re not in a bad position. The only weak point, and we know this, is the administrative courts. Our efficiency there is a bit below average. Where do you see the greatest need to relieve pressure and clear backlogs? It’s not that the administrative courts are blocked, but they received more responsibi lities these past years and decades. One of the proposals to resolve this is the law on judicial clerks. Cases are increasingly technical, so that it’s no longer just a question of legal expertise, for example, in tax matters. Urban development is another such field, or financial crime. The law will allow the recruitment of specialists who will support the magistrates. The government in its 2018 coalition programme announced a series of legal reforms, including family law, company law, whistleblower protection, juvenile delinquency... Mid-way through the election cycle, how confident are you about progress made?

I’m optimistic that we will be able to conclude the big projects. Concerning whistleblowers, for example, we’re in the final talks with other ministries. In family law, we’ve submitted the project on access to personal origins, which depends on another project, on filiation, where we received the opinion by the state council just before the summer. Another project concerning family is a reform of adults under guardianship laws. Parliament is working hard on bankruptcy law. We’re working with the education ministry on the protection of minors. There are a lot of things happening. There have been headline-grabbing incidents in recent months--muggings, Luxembourg City hiring private security agents--and questions raised about the justice system’s ability to respond. I take this extremely seriously. There isn’t a lot that’s worse than feeling unsafe in everyday life, in your environment. As a politician you have a responsibility, first, not to stoke fears unnecessarily; secondly, to reassure people and explain what it is that you’re doing; and third, not to paint a wrong picture. Our justice system has no tolerance for violence. Neither do I. We’re working on a series of measures. Once the police and the justice system get involved, we’re treating the symptoms of a problem. We must act against violence in schools, prevent this from becoming habitual at the level of juvenile protection and delinquency. A large part of crime comes from the drugs problem, which we need to consider how to address. Police are being reinforced and we are reviewing laws to see where they don’t have the authority they need to act. Sam Tanson was appointed justice minister in September 2019 Interview CORDULA SCHNUER Photo ROMAIN GAMBA

[This interview was conducted before a 4 September incident in the Gare district involving a private security agent.]

OCTOBER 2021

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Ristretto #Business

OCTOBER 2021

“A turnkey solution, part of the circular economy” Startup Capriole won the product design category in Luxinnovation’s Circular by Design Challenge earlier this year. Founder Marko Klacar shares his vision for sustainable use of coffee waste. When did you launch Capriole? I started a company in 2019 just to have [one], but the project started in July 2020--that’s when I got covid and was in confinement in Prague… a completely different project than what I ended up with, but that’s when it really took off.

How much coffee waste is generated in Luxembourg? I couldn’t tell you exactly [for Luxembourg], but a normal cafe produces around 2kg and a busy cafe produces around 5kg of waste per day. Do you eventually want to tackle coffee capsules too? We’re working on a loose initiative with another person, [who] would like to take the plastic part from the capsules... that’s on hold for a [later] phase…

So the idea wasn’t sparked over a cup of coffee? It was! But that cup of coffee took place in 2010 [while] having an espresso with a friend in Sweden. He said, ‘hey, do you know that you can use coffee waste as fertiliser?’, and I said, ‘get out of here!’, but that has always lived in the back of my [mind]. When I was in quarantine, I’d watched every series known to man. I’d gone to the deep side of Youtube-where they show you how to survive shark attacks and talk to giraffes--I figured, let’s see if I can make a run at using coffee waste as a product… ESG is something I’m very passionate about.

How exactly can these briquettes be used? The primary use will be as a replacement for briquettes for grilling. We kind of moved away from fertiliser [to] briquettes you can use for smoking or grilling meat. They burn, it works--and what’s interesting about it is there are no binders, it’s just coffee waste. If you pick up regular briquettes, there’s always a warning label; they’re impregnated with chemicals… My dream is that in future, homes will be heated by coffee pellets. Coffee is said to have a higher energy content than wood: it burns hotter and doesn’t involve deforestation or that much transportation… This is a billion-euro market, and the three biggest countries heating homes with briquettes are Belgium, Germany and France. Strategically, Luxembourg is quite well positioned.

You talk about using coffee waste as fertiliser. But can you tell me, in a nutshell, the precise idea behind Capriole and your key focus areas? It started just wanting to use it as fertiliser; nobody really sells it commercially. I saw people were willing to pay for this, so I started contacting roasters in Luxembourg. It turns out that one of the roasters at a cafe in Echternach was also looking at pressing briquettes from coffee waste… We want to sell the briquettes but to do it in a way that it requires as little infrastructure as possible… I tell roasters how to collect the coffee waste, how to press it. They can do it, and under their own label, so we avoid transporting coffee waste. It’s a turnkey solution, part of the circular economy. How large are these pressing machines? Height-wise, maybe 2m… not something that takes up an insane amount of space.

Your briquettes have been travelling a bit. What’s the range of locations of interest? [Recently], a woman in Eritrea reached out to me… many reach their 60s, women especially, and they’ve inhaled so many fumes that there are serious health issues. She’ll try them out and see if there are health benefits compared to regular firewood. There’s also interest from the Americas and Europe. Capriole’s Marko Klacar’s dream? Homes heated with coffee waste pellets

Interview NATALIE A. GERHARDSTEIN Photo MATIC ZORMAN

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Ristretto #Finance

OCTOBER 2021

“ The Nordic market is going to grow” Ahead of the Association of the Luxembourg Fund Industry’s roadshow to Scandinavia, Delano spoke with its working group chair, Isabel Høg-Jensen, about the outlook for the Nordic funds market. So you’re participating in the Alfi roadshow to Copenhagen and Stockholm on 5-6 October? Yes, both... essentially because the Nordic market is going to grow, I believe, in the future. Can you give us a sense of what you mean? As of May 2021... Denmark, for instance, entered the top 10 list of origin of promoters.... I think this is a very positive and encouraging message that they’ve entered the top 10 list. And what we can also say is that Nordic asset managers [run by larger banks] have been here since the ‘80s... It’s not new, what might be new is that the smaller, mid-sized asset managers have already started to come to Luxembourg and I think there will be more of them in the future. What are these investors looking for? In Denmark, for instance, you have those large pension funds that traditionally invested in Ucits [retail funds]. And now the trend that we see is that they might also invest into liquid alternative investment funds, and particularly those who follow an ESG [responsible investment] strategy. And as you might know, you have the [EU] new regulation, the Sustainable Finance Disclosure Regulation, that came into force, where Ucits [management companies] and [alternative investment fund managers] have to disclose certain information on how they take into account sustainability risk in their investment decisions. So I think Luxembourg can certainly play an important role marketing themselves as a place where you want to follow the transition to the green economy. Nordic fund managers have a reputation for being ahead of the curve when it comes to ESG. So what does Luxembourg offer them? You can see certainly from the sustainable finance roadmap that Luxembourg has issued that there is a vision, and there’s a far-reaching sustainable finance strategy, [to] really contribute to the 2030 agenda, and also to the Paris [climate] agreement. So I do believe that that’s a common objective for the North and for Luxembourg to move into a green economy.

What are the challenges in serving the Nordic market from Luxembourg? I think what is important when you serve the smaller and midsize, the upcoming independent asset managers from the North, is really to understand where they come from. Traditionally, they come from a setup which is different from the Luxembourgish one. In Luxembourg, a lot of functions are outsourced. We don’t have the asset managers in Luxembourg. Whereas in Denmark and Sweden, that’s not the case, they have them there. And they’re not used to outsourcing, they’re used to having control. And that also means an excellent corporate governance, because you have control... So I think when you onboard clients, especially from the North, at least that’s the market I know a bit more, it’s important for you to understand where they come from. And it’s important to give them comfort that what is delegated to Luxembourg service providers is done properly. And that they have sufficient control or insight or reports on what is done and how it’s done. How does that manifest itself? Do they ask more questions than a Luxembourg or German or French fund manager? Might be, it’s just because they have to get used to the setup... It’s not an issue, I would say, it’s just to keep in mind, to understand, where do they come from? Which kind of business model do they come from? And which one do you have to fit into?

Isabel Høg-Jensen is head of the Nordic desk at the law firm Bonn Steichen & Partners Interview AARON GRUNWALD Photo MIKE ZENARI

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Ristretto #Culture

OCTOBER 2021

“ We know that more needs to be protected” From 24 September to 3 October, historic sites in Luxembourg are opening their doors. Beryl Bruck, a senior advisor at the culture ministry, oversees the event that comes as new heritage laws are underway. For the second time, the European Heritage Days are taking place during the pandemic. What can we expect from this year’s edition? It was really important to us that events take place physically and not just virtually. This year’s theme is ‘Heritage: All-Inclusive’ and there’s an emphasis on making sites accessible for people who might otherwise not be able to visit. For example, there are walks for people with limited mobility. The castle in Useldange has been refurbished for people with impaired vision. But we also have a programme for children.

How does the cooperation between communes and the ministry work? When a building is listed, this concerns the exterior and the interior. At commune level, it’s often just the exterior that’s protected. With the new law, the criteria are becoming much stricter. Buildings that are now protected under national rules might no longer be in future; others might be added. But buildings that might no longer be authentic inside and out could still be important for the commune and its appearance. It’s complementary.

There are well-known historic buildings in Luxembourg, like the old post office or the former Arbed building. What are some of the lesser-known heritage sites? One of the ideas of the Heritage Days is to open buildings that are normally not accessible. This includes lesser-known buildings, such as the Hal Nennig. It’s a hangar that was designed by Luxembourg engineer Emile Nennig. Construction began in 1948. The castle in Colpach is another hidden treasure. There are many other places like this.

These things often come to public attention when something is being demolished. How do you balance urban development with protecting what’s already there? The protection of heritage and using space for housing and other needs aren’t mutually exclusive. In the framework of the Heritage Days, we have a conference with examples on how you can refurbish, such as an old school being converted into housing. There’s a fear that when a building is listed, you cannot do anything with it, but a lot is possible. We subsidise remodelling works and the architects of the national monuments service also help to find ideas and solutions.

There is a reform process underway of national heritage laws. How does this respond to criticism that Luxembourg isn’t doing enough to protect its patrimony? Currently, 1,773 buildings are protected at national level. At commune level, there are 14,690 protected buildings. We know, of course, that more needs to be protected and that this needs to be done more coherently. Work is underway to create inventories of every commune, which already exist in other countries, like France. They’re the basis of the new law. If you look at a commune as a whole, you have a much better view of what should be protected, and buildings will be listed as a group. The inventories will undergo public consultation, and citizens can submit their feedback.

There are plans to boost heritage tourism in Luxembourg. What potential do you see for the culture ministry to get involved? We are a part of this topic. Historic sites are an important part of tourism. The monuments service is responsible for managing these sites, making them accessible. That includes castles, but also industrial heritage. We are working on ideas. You only have to watch one nation branding or tourism video and there’s a castle in it.

Heritage and housing aren’t mutually exclusive, says Beryl Bruck

Interview CORDULA SCHNUER Photo MIKE ZENARI

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Dashboard #AutumnFigures

Source

Eurostat

5,000 Hours of manual labour required each season to grow a pumpkin patch.

Germany

Source

Poland

Hahn pumpkin farm

France Netherlands

7,020,100

€145.54

Belgium Denmark Spain Italy Austria

Monthly spending on clothing and footwear for a family of four in Luxembourg City.

Sweden Czech Republic

Source

Finland Portugal

288,000

Total EU 55,316,100

Ireland Greece

Numbeo, September 2021

Lithuania Hungary Romania

Luxembourg’s annual beer production, in hectolitres.

Croatia Bulgaria

Source

Latvia Slovakia Slovenia Estonia Cyprus 16,400

Malta 0

10m

12m

Share of women among teaching staff in secondary education; the figure drops to 34.2% in tertiary education.

LUXEMBOURG WORKFORCE

Source

Employment by nationality and country of residence, end of first quarter 2021. Luxembourgers and foreigners living in Luxembourg each made up roughly a quarter of the workforce. Nearly half of all employees were cross-border commuters. Source

Statec

Residents 53.9%

Cross-border workers 46.1%

Luxembourg nationals 26.6% Foreign residents, EU nationals 23%

Belgium 10.8%

Germany 11% France 24.3%

53.8%

Foreign residents, non-EU nationals 4.3%

OECD

“ I live in the future!” Rodrigo Sepúlveda Schulz

One of four co-founders of Expon Capital, a venture capital firm, said the 26 companies in his portfolio had collectively raised $1.1bn between January and August 2021. This includes Glovo (which raised €528m), Pliops (€65m) and Refurbed (€54m).

Matic Zorman (archives)

Luxembourg

The Brewers of Europe, European Beer Trends, 2020

Photo

OCTOBER 2021

POTATO PRODUCTION EU countries raise tubers roughly in line with their geographic size, with Luxembourg and Malta at the bottom of the table, although the Netherlands, Belgium and Denmark are major producers. Figures are tonnes harvested in 2020.

EARLY SCHOOL LEAVERS Percentage of 18- to 24-year-olds with at most lower secondary education who were not employed or in education or training when surveyed, select EU countries.*

MALTA

Eurostat

GERMANY

16.7%

OCTOBER 2021

Source

EU27

9.9%

10 8%

CROATIA

2.2%

19 20

11 20

19 20

15 20

19 20

8.2%

19 20

FRANCE

LUXEMBOURG

19 20

10.1%

* Some data provisional; methodologies changed during the ten-year period

LEAVING THE NEST

EMPLOYMENT BY SECTOR

Young people in Luxembourg left their parents’ home six and a half years earlier than the European average in 2020.

Professional, scientific and technical activities have notched up the biggest job gains (+53%) over the past decade*, followed by ICT (+42%), administrative and support services (+40%), and the construction sector (+27%).

Source

Eurostat

Source

Croatia Slovakia Italy Malta Portugal Bulgaria Spain Greece Ireland Poland Romania Slovenia Hungary Cyprus Latvia EU27 Czech Republic Lithuania Belgium Austria Netherlands France Germany Estonia Finland Denmark Luxembourg Sweden

Statec

TOTAL 2012 352,346 17,252

36,783

TOTAL 2021 452,960

39,026

69,915

21,689

36,912

84,062 48,854

49,443

97,954 41,844

26.4 years old

14,610 99,643 74,649 51,892

Industry

Construction

Information & communication 0

Wholesale, transport & hospitality Financial services

Specialised activities

* End of first quarter each year, rounded

20,778

Other activities

Administrative & support services

MAY 2021 OCTOBER 2021

On 16 a mission: Belgian ambassador Thomas Lambert is keen to bring key players and institutional representatives from Belgium to Luxembourg to explore developing economic sectors such as space resources and logistics, among others

Conversation

Conversation Thomas Lambert

“It’s about the dry stuff, the little stuff, that helps people in this cross-border reality” The centenary of the Belgium-Luxembourg Economic Union and the signing of seven agreements at the so-called Gäichel summit on 31 August have underlined the close ties between the two countries. Belgian ambassador Thomas Lambert talks about bilateral relations, compromises and trust, and looks at initiatives aimed at further benefitting the two economies. Interview DUNCAN ROBERTS Photo EDOUARD OLSZEWSKI

Luxembourg and Belgium recently concluded several agreements at the so-called Gäichel bilateral summit, the most impactful of which is obviously the extension of the cross-border working period. How important is the new agreement in the context of the post-pandemic shift being made by many companies to allow more teleworking? I think it is particularly important. We struck a compromise, because, at present, it’s not too clear which way it will go. Will we all go back to normal as far as the precovid telework rate is concerned? I test the waters with the people I meet, and you have people who say, ‘Oh, God, I’m so glad to be able to go back to the office’. And then you have other people who say it gave them a better balance with family life, for whom it was a positive experience. You hear different perceptions from employees and employers. Also because we have vast uncertainties looming. So we agreed on telework flexibility, be it in the context of covid, or structural agreements. It is a compromise. And it is a compromise that takes into account

THOMAS LAMBERT SELECTED CV October 2000-August 2004 First secretary, Belgian mission to the World Trade Organisation September 2004-March 2007 Head of trade section, Belgian permanent representation to the EU March 2007-July 2009 Deputy head of cabinet, Belgian ministry of foreign affairs August 2009-August 2013 Deputy permanent representative, Belgian Permanent Representation to the United Nations August 2013-August 2017 Deputy ambassador, Belgian embassy to the United States of America August 2017-November 2019 Director for the EU economic and monetary union, Belgian ministry of foreign affairs November 2017-November 2019 City director, House of Genius, Antwerp November 2019-September 2020 Diplomatic advisor, office of prime minister of Belgium (Sophie Wilmès) September 2020-current Ambassador of Belgium to Luxembourg

the interests of both countries, but also the interests of the citizens themselves. I think that’s the big red line in our excellent bilateral relations. Most of the agreements are not particularly sexy. It’s about dry stuff, little stuff, that helps people in this cross-border reality of the Greater Region. There was also an agreement on managing emergencies and civil security. What sort of concrete form could this take, and were any of the details or the urgency of this agreement impacted by the devastating floods that affected both countries in July? That was on track already. We already had legal instruments for mutual cooperation. I remember that when the floods started, I was having dinner in a restaurant with my wife, and I got a phone call from my minister’s cabinet to ask Luxembourg for assistance. I got in touch with the Luxembourg side, but they said, ‘Well, it’s very nice of you to call us, but we’re already on the way’. I had a similar experience when I was informed that we had a rogue sol-

OCTOBER 2021

Conversation Thomas Lambert

dier, Jürgen Conings [suspected of extremeright views, he had gone missing in June after stealing arms from a military base and threatening public figures]. I got the relevant Luxembourg colleague on the phone and he said, ‘Just so you know, we’re already on the spot’. Very often ambassadors have to run after the facts. The mechanisms are so well oiled that we barely need to urge Luxembourg to take action. They are much faster than I can act. And that is a very good sign. Looking ahead to this November’s COP26 summit, what are the main challenges and opportunities Belgium faces in terms of climate change? We are, of course, ambitious, you know, to prepare our society for necessary transformations. ‘Fit for 55’ is an objective that we subscribe to, even though internally, because there is also a large regional competency in Belgium, we want to look at how the efforts will have to be divided, at the burden sharing, that will be inevitable.

Our [respective] ministers for energy had a very good discussion [at the Gäichel summit] on the perspectives for hydrogen and wind energy cooperation. Luxembourg is investing with Denmark in an energy island, and there may be a backbone from that island along the North Sea also going to Belgium and involving Belgian companies. And so you can close the loop. Hydrogen is very promising as well. I will be talking to my minister’s office on how to set up a workshop or a seminar here in Luxembourg, preferably in a Benelux context on how we can move forward. Because the Benelux countries are forerunners on hydrogen and we have very promising projects in all three countries, like the truck tanking station that will be inaugurated, I believe, in spring 2022 here in Berchem. Over the summer we also witnessed the withdrawal from Afghanistan. That showed that Belgium-Luxembourg cooperation on the A400M military

plane was working well even before the formal signing at the recent summit. But what does the actual agreement entail in practical terms for the Luxembourg plane and crew? It’s basically an agreement that is about joint management of the transport wing. So it’s not just about that one Luxembourg aircraft, it’s the entire fleet, which consists of eight planes. But you need to know, the crews are mixed. They no longer make the distinction on the basis of nationality, or of the plane or of the crew, the loadmaster, or what have you. And they also use Findel as a landing and take-off zone for that unit. It’s one team, but what happens if there is a purely national operation? Let’s say you have to evacuate just Belgian people from an unnamed country in Africa. Can we then use the Luxembourg plane or not? The treaty says yes, unless the Luxembourg side pulls the red card, as the military people say, and tells us they would rather we didn’t. Can Luxembourg

Nader Ghavami

Good relations: Belgian prime minister Alexander De Croo and Luxembourg’s Xavier Bettel share a light-hearted moment at the Gäichel summit on 31 August at the European Convention Center on Kirchberg

Photo

OCTOBER 2021

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Conversation

In terms of bilateral trade, Luxembourg is very important for Belgium. I think many of our readers would be surprised that, in fact, Luxembourg imports more from Belgium than from its larger neighbouring countries, France and Germany. It’s sometimes funny when, as a Dutch speaker, I go to Delhaize here and see everything is like in Brussels, with bilingual Dutch and French labels. Yes, our bilateral relations are deeply rooted, and the Gäichel summit was the perfect example of that. One little disappointment from my side is that it was not covered at all by the Flemish press. Not one mention of it. And that tells me that there is some work to do for bilateral ambassadors and regional colleagues. Because Flanders has very large competences also for foreign trade and they’re very ambitious at that level. They go to India, to the United States… It is my personal opinion that they don’t do enough to see the low-hanging fruit with their neighbour, and I think we need to work on that in the coming years. But we have several missions coming up. The Brussels minister for multilingualism is coming to talk with ministers [Claude] Meisch and [Marc] Hansen to see whether we can learn something from the Luxembourg linguistic situation… to take a look at the vertical multilingualism at school and how they deal with it. Of course, you cannot copy-paste that, but you can be inspired by it. We recently had a visit by the Walloon minister-president Elio Di Rupo, who met with [economy] minister Fayot to set up a working group of civil servants to work on space policy cooperation. He will return in December to see how that

100 YEARS OF THE BLEU Signed in 1921, the BelgianLuxembourg Economic Union (BLEU) came into force on 6 March 1922. It came about when, because of the collapse of the German Zollverein of which it had been a part, Luxembourg suddenly found itself isolated. France rejected advances of any form of economic union, and, according to Thomas Lambert, Belgium was also initially reluctant. “But then we changed our minds and ever since it proved to be a recipe for success because of its inherent flexibility,” says the ambassador, citing the changes that have come along such as the Benelux agreemewnt with the Netherlands and the European Union and the introduction of the Euro, “which meant the common currency [the franc] evaporated”.

And then in April next year the Antwerp Chamber of Commerce will come to Luxembourg. They are attaching quite some importance to that visit, illustrated by the fact that both their CEO and chairman of the board will attend. They want to see how Luxembourg is evolving beyond the cliché of the financial sector--the supercomputer [Meluxina] is obviously very interesting, the space sector, whatever is happening in and around Uni.lu at Belval, what Luxembourg is doing on renewable energy, digital embassies, electrifying cars, public transport and the famous Luxembourg tram. That is a stepping stone approach to what I want to achieve, which is a fullyfledged Flemish economic mission to Luxembourg.

You have previously mentioned the logistics sector as playing a vital role, and especially the new smart port in Antwerp. Can you explain a little more? I'm personally very enthusiastic about that. Antwerp is the second biggest port in The convention governing the Europe, and one of three European ports union was amended in 2002 to allow the two countries to extend their that are still in the top 20 in the world. collaboration beyond the mere They are working very hard to digitise the economic and monetary fields. port to make it ready for ‘Fit for 55’. That “It ranges from exchanging is a big challenge for the number two petstatistics, which is not very sexy rochemical cluster in the world. but vital for economic cooperation. It also is a tool that helps us Hydrogen and electric tugs will be to negotiate common investment introduced, along with hydrogen and agreements.” This is important, electric trucks and the ‘elephants’, as we the ambassador says, because “the EU for the time being is not call them, the big cranes that move about covering everything” in that field. in the port. “There will also be a stocktaking They are also introducing at breakneck exercise of all existing BLEU bilateral investment treaties, speed a quayside stream network. Very in order to see to what extent often ships, when they’re in the port, they they are not being supplanted keep their engines running because they by EU treaties or not.” need electricity. That’s diesel based and Lambert likens all these treaties, extremely polluting. So the policy is now the BLEU, the Benelux and the EU, to a lasagna. “To the extent that to electrify the docksides so that they can if one layer is not covering a certain switch off the diesel engines and plug in field, the other layer can take care into the Antwerp network, which is to a of that. And that is where the BLEU fits in.” large extent wind energy driven and will be introducing green hydrogen. Of course, international shipping has so far largely escaped the green trend, but it’s only a matter of time until the maritime and airline industries have to adapt. You were referring specifically to Nxtworking group is progressing. At Gäichel Port, which is a data-sharing partnership there was a meeting of federal compe- between the port of Antwerp and the 40 tences and cooperation in the field of the biggest companies in the port, most of United Nations to try to develop a frame- them being petrochemical, the pilot operwork for the peaceful exploration and ators and the Flemish traffic agency and exploitation of space resources. so forth. They have data on the position-

SIP/Jean-Christophe Verhaegen

crew be used for purely national Belgian operations? Yes, unless the red card is pulled. What if there is an accident, what’s the state’s responsibility? It’s those little details that are set out in that treaty. But, as you say, the treaty came after quite a risky live operation and questions like responsibility, who does what, were not even invoked. And that, for me, is a sign of very deep trust between the two countries and, above all, between the two militaries. Many Luxembourg officers are trained and are still being trained in Brussels. So we know them, and they know us.

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OCTOBER 2021

“Luxembourg is on that crossroads, and that is exactly why the Antwerp Chamber of Commerce wants to come to Luxembourg”

And then, last but not least, you also ‘look, we’ve always dealt with it in a bilatcontribute to security and the fight against eral way, now there’s Europe… We’re organised crime. Because you will be able hopefully at the end of a crisis-stricken to set up what we call a certified pickup era, we need to invest into competitiveby the freighter, so that you significantly ness, into the recovery plan. And at the reduce the time the container sits idle same time, money is very cheap.’ on the dock, and that’s delicate because So we have a number of opportunities that’s when drugs are taken out, or put that we can seize here. And they agreed in, etc. And the port is too big to super- on seizing two European commissioners, vise all the containers. I do not dare to Madame [Adina-Ioana] Vălean for transmention the very low percentage of con- port and Mr [Frans] Timmermans, because tainers that can be inspected. he’s ‘Mr Green Deal’. They wrote an offiThey will also be working with flying cial letter and they got a very positive and sailing drones to inspect the entire official reply. port area, which is enormous. They are But my transport minister had a bilatintroducing sniffer sensors to detect eral meeting after the Gäichel summit abnormal scents if there is something with EIB vice-president Kris Peeters, who odd with the petrochemical exhausts. happens to be a Belgian and is also in They are introducing a system of 600 charge of the transport policy of the EIB. cameras that can detect patterns in the They discussed the train connection and port and sound the alarm if something the financing needs, and I understand weird is happening. the meeting went well. The EIB has very All of that is creating an ecosystem deep roots with public transport systems, which will produce spin-offs, not just for bridges, infrastructure, etc. And it has a the whole of society, but also for the very deep expertise on both the techniupstream and downstream logistical con- cal aspects of those projects and the financnections. That brings me to Luxembourg, ing needs. ing of containers, even on board ships that because an international port like AntBut the message that we acknowledge are still at sea. They will merge that data werp, or Antwerp-Zeebrugge as it has is that whenever you upgrade that train with the data from the train operators, the become, is also looking at what is hap- connection, there needs to be a business truck operators, the traffic system, so that pening upstream. So the connection to case for it… because you have the perthey will be able to optimise the time spent Athus, Arlon, Bettembourg and Dudel- spective of the liberalisation of European in the port of every individual container. ange, and even beyond, connecting to train connections and operators. So you They can avoid unnecessary moving back China, even though that’s not been a big need to present them with an economiand forth of containers. Ideally, we need success for the moment, is of interest to cally viable case. That could mean extendto come to one movement for one con- Antwerp. Luxembourg is on that cross- ing the connection, so it’s not just tainer. We’re now at, I think, two or three roads, and that is exactly why the Ant- Brussels-Luxembourg, but also Strason average, which is already very efficient. werp Chamber of Commerce wants to bourg, maybe Bern and maybe even ChiBut if you can bring it down to just one, come to Luxembourg. And Luxembourg, asso, on the Italian border. But if you you can position your trucks and your of course, is also a world class centre for want an efficient connection, you also trains so that you can pick up your con- financial solutions to all this. Not just need to reduce the number of stops. Maybe, tainers much faster. the Luxembourg financial sector, but also personally off the top of my head, that On the basis of the data clouds, you the presence of the European Investment means Brussels-Namur-Arlon-Luxemcan also start creating spot markets for Bank is very interesting for us. bourg and then beyond. individual products in containers, so that So, no, there was no spectacular prothey can change their destination even Talking of efficiency, the problem gress, but there is good energy. If at the of connectivity between Luxembourg while the containers are still at sea. same time our telecommunications minWith NxtPort, we will be able to know and Brussels is a recurring bugbear isters talk about rolling out 5G on board whether an individual container carry- for frequent travellers between the trains, it connects with the mobility issue ing, say, bananas, was on top of the ship two European capitals. Little concrete between Brussels and Luxembourg. I’m in the full sun, so it’s more perishable progress was announced at the pretty hopeful, even though it’s going and has to move quicker. If a container Gäichel summit. What can the to take a lot of time and will only see was bound for Aldi in Germany, for exam- respective governments do to get the light of day well beyond my stay here ple, and they have an oversupply [of things moving, so to speak? in Luxembourg. bananas], they are put up for sale and First and foremost, we share the analysis might be bought by Carrefour in France that something needs to be done. Both or by Albert Heijn in the Netherlands. our ministers [Georges Gilkinet and Also we are already able to do all the François Bausch] are eye-to-eye on it. It’s shipping formalities before the ship docks. at that point in time where they said:

OCTOBER 2021

Thomas Lambert

OCTOBER 2021

Kleos Space CEO Andy Bowyer pictured at the company’s offices in Bonnevoie. The company is moving into new HQ in November

Conversation

Conversation Andy Bowyer

“The need for more data is… increasing beyond our expectations” Kleos Space CEO Andy Bowyer talks about the company’s activities in the US, new investment, satellite cluster launches and the continued importance of Luxembourg’s space sector and what he hopes for the future of the Earth observation industry. Interview DUNCAN ROBERTS Photo MIKE ZENARI

You recently temporarily relocated out to the United States from Luxembourg. What was the motive behind the move? As CEO, I’m the most forward leaning, from a strategic perspective, in the business. So I’m trying to be as accessible to potential investors in the US as I possibly can, in addition to ensuring I can safely and easily attend and speak at conferences, etc., to grow the business. It was clearly a lot easier to do this a couple of years ago, but given the pandemic we decided that for a period of time I needed to be physically ‘in country’. I’m the representative of the company, and we are a Luxembourg company. So in the investor presentations, I’m not just representing Kleos, I’m also representing the Luxembourg ecosystem. I get a lot of questions about the way we started in Luxembourg and how it enabled us to have that springboard to where we are now. I’m very passionate about the warmth and ecosystem within Luxembourg that gave us the head start to go off and grow, but evidently most of our customers and investors are outside the country. We need to fully engage with them to make the most of the opportunity we have been given. The way that we present ourselves internally within Luxembourg government, for instance, is to all intents and purposes that we’re an inward investment

ANDY BOWYER SELECTED CV Education BsC in project management from Beckett University, Leeds, UK December 2003-August 2005 Commercial manager at Zeroshift, an automotive engineering company August 2005 Co-founder and director of Magna Parva, a space engineering business August 2012 Co-founder and director of MP Packaging, which deployed space engineering technology into beverage cans June 2017 Co-founder and CEO of Kleos Space

story, because we are bringing external investment into the country where it’s being spent. But then we’re also an export opportunity as well, which is where the profit centre is, obviously. So it ticks both sides of things. In January you opened an office in Denver, which has a tradition of being an aerospace location and is now labelled Aerospace Alley.

But what are the advantages for Kleos of being there? Because we literally work around the globe--we have a variety of customers from Australia, New Zealand, obviously a lot in North America, Central America, South America… we’ve got a difficult time zone issue. The objective was to get somewhere eight hours out from Luxem bourg. That gives us the ability to really cover within two working time zones two-thirds of the day and 90% of our customer base. It’s a good parallel engineering effort to the Luxembourg one from a customer support perspective. It also doubles up, in the sense it means that people are working essentially nights for us in Luxembourg, so you end up with quite an efficient schedule. But Denver is also the centre of a huge amount of aerospace, defence and space activity. Tens and tens of thousands of people are employed in that domain, both driven by the government bases and the activity that goes on in that, but then also by all the surrounding companies. In particular, in our area, there’s a lot of radio frequency engineering capability, which is pretty rare around the world. So there’s a very strong seam of human resources that we can tap into. We have done really well in Luxembourg because there’s a tremendous capability in France in this

OCTOBER 2021

Conversation Andy Bowyer

OCTOBER 2021

KLEOS SPACE THE STORY SO FAR particular domain. When you’re employing people that are very, very specialised, you’ve got to go to the people to a certain extent, and make sure that you’re facilitating things. Most people are working from home anyway, but it’s still nice to have clusters of people. But, as you’ve already indicated, Luxembourg will continue to be of importance to Kleos, and vice versa? Yes, we have just announced that we are investing in a new bespoke facility in the newly built ParcLuxite Business Park in Kockelscheuer. We’re going to move in in November. It’s a 190m² headquarters that will be home to our testing and operations facilities as well as mission control centre, from 1 November this year. This is about really making sure we’re investing in testing facilities, and satellite operation facilities, etc. Obviously, the pandemic has hit economies around the world pretty hard. Has Luxembourg continued, in your view, to do enough for the space sector during the pandemic, or has that taken a bit of a backseat? I think you have to contextualise it. Luxem bourg is a country with limited resources or bandwidth to do things. The government isn’t employing hundreds of people in the Luxembourg Space Agency. The ministry of the economy is relatively tight in terms of the numbers of people

“ Building a strong investor base and increasing the strength over a period of time is validation in the model”

2017 The company is founded by Andy Bowyer and Miles Ashcroft of UK-based space engineering firm Magna Parva as a spacepowered Radio Frequency Reconnaissance data-as-a-service. The Luxembourg government commits to €2m in funding. 2018 The company launches its Initial Public Offering on the Australian Securities Exchange and raises A$11m. Kleos signs Tier 1 government MOUs. In September, the company graduates from the Technoport in Belval and moves to offices in Bonnevoie. 2019 First commercial contracts are signed. 2020 In November, Kleos launches its Scouting Mission from Chennai in India--the world’s first four-satellite cluster flown in a formation for precision geolocation capability. 2021 In January, Kleos opens an office in Denver, Colorado. On 30 June, Kleos launches its second satellite cluster, the Polar Vigilance Mission, into a 525km Sun-synchronous orbit. In July, Miles Ashcroft is appointed to the role of chief innovation officer to oversee the company’s research and innovation activ ity. Technical director Vincent (Vinny) Furia is promoted to succeed Ashcroft as chief technology officer.

that they can deploy on different p rojects. So I think it’s fair and right that the prioritisation, particularly over the last 18 months, has been on making sure business as a whole is continuing, and people are continuing to be employed. There are priorities which are clearly greater than this particular niche industry. And I think that is not a criticism at all. I think they’ve done a fantastic job supporting businesses, including ours, through the pandemic. And they’ve created some initiatives, particularly in the space sector. Luxinnovation, alongside the Luxembourg Space Agency, have delivered a lot of good support. The flip side is obviously space is an enabler for us, but our industry is pre-

dominantly defence and security in terms of our export. And we have continued to get support and assistance, even if people are stretched and working very hard, in a wide range of different ways. Yes, you have reiterated the fact that you don’t see yourself as a being in the space sector, per se, but you are in this defence role… That’s always an interesting one. What we traditionally call upstream space is building satellites, building and launching rockets, building moon rovers, that sort of thing. The rest of us are space enabled to a certain extent, and you could even include SES in that domain--they could call themselves all sorts of different things, TV broadcasting, communications company, whatever… It’s always been interesting to me, looking at how the numbers get used in different areas. But yes, our focus is on the customer base and the markets we service. End of June you launched the Polar Vigilance Mission carrying a second satellite cluster. What were the challenges of conducting a launch in the midst of the covid pandemic? No, that was very, very straightforward. I mean, compared to the first launch in India [from the Satish Dhawan Space Centre in Chennai in November 2020], which was a horrendous experience of trying to get people into India, then getting locked down, getting out on one of the last flights and then getting delayed and delayed. The second launch was smooth. I mean, you still had to apply for a special licence to travel, but the process by that point was in place. So it’s just following a process. And KSF2, the next cluster of four satellites, is due to launch in December. Where will that cluster orbit and how does that expand your capabilities when it becomes operational? It will be on the same Sun-synchronous orbit, going over the poles. The reason you build out a constellation from single clusters is to increase your revisit rate. They take 90 minutes to orbit, so the more satellite clusters you have in that same orbit, but trailing each other, the more often you see that same place on earth. Basically, that gives us more data to sell. And the more we have, the higher the value of the data.

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Conversation Andy Bowyer

OCTOBER 2021

An artist’s impression of Kleos Space’s KSF1 mission of four cluster satellites which are in a Sun Synchronous Orbit

tremendous amount of commercial sup- So how do you see your sector growing port from the marketplace. The need for and developing over the next 10 years? more data is obviously very much there Our industry specifically is Earth obserand is increasing beyond our expecta- vation. Using satellites to collect data tions, to be honest. The hurdles are often about what’s going on around the Earth, technical--the ability to get collect into whether that’s weather, what we’re doing people’s hands and developing all the which is Radio Frequency, whether it’s different subsystems and everything else Automatic Identification System or Autothat’s required in order to deliver and matic Dependent Surveillance-Broadcast fulfil those customer needs. We’ve proven or taking photos in optical or in synthetic the technology chain out. So we’re build- aperture radar… you know, there’s lots of ing up the database from very low-level verticals. There is a lot of work being done data into something much more capable in artificial intelligence and machine learnover the next six months. It’s a journey, ing to bring all that information together. I guess, with the customers. What we’re seeing very recently is a trend much more down towards those And the announcement end of August people that are developing those tool of new investment worth A$12.6m sets to bring different datasets together You said in an earlier interview this obviously reiterates the fact that there to create a solution for the end user. And year that Kleos expects to start is this solid base to your business model. I think that there’s a big growth area there. generating revenue in the third quarter Yes, there’s a fantastic support from the But I think when you start to look at of this year. Is that still on target? investor base. And the guys brought into this industry of observation, or intelliWe are making great progress working this round are premium names in the gence collection, we’re all very siloed in through that process. We have a big pipe- institutional investor market. Particularly terms of suppliers, whether it’s ourselves line and we’ve got nearly 50 evaluation Perennial Value Management and Thor- or Spire, or Planet, or whoever. There is contracts in place with a very wide range ney Investment Group are very big in the clearly some opportunity for consolidaof subscribers around the world. They Australian institutional marketplace. Obvi- tion. I think that would change the dynamic are converting from free-trial periods or ously, the money is important, because from relatively small companies working into paid periods. And we’re working it keeps the CapEx model working and in verticals to being very large conglomwith a number of our integrated custom- allows us to invest in more satellites and erates. I think it’s a natural evolution for ers around the world on larger projects. invest in more growth. But it’s also about the market to bring those things together We have a lot of proposals and quotes building a strong investor base and increas- and control the full value chain. out, for next year as well. ing the strength over a period of time is So it’s a curve, and we’re starting on validation in the model, as well as the our way down that road now. There’s a marketplace that we generally work in.

Illustration

Kleos Space

And you work on this subscriber model. So what’s your target audience at the moment ? There is a lot of commercial. We roughly have about a third that is government agencies and various departments, and twothirds commercial. Very often these are analysts or integrators that are taking different datasets and delivering end solutions into what are often government applications. Truly commercial operations or applications tend to be a little bit lagging behind the government applications because there are smaller budgets and they take longer to convert. So we have some commercial opportunities in the pipeline, but they’re probably a little bit further behind…

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OCTOBER 2021

Funds: enhancing transparency for sustainability Sponsored content by ARENDT REGULATORY & CONSULTING

The European Union has been introducing a major regulatory reform to ensure that the management of collective investment schemes supports the transition to a more sustainable economy. These changes apply to various financial market participants, as well as to targeted operating companies, which will be obliged to integrate ESG and sustainability risks into their management and to demonstrate greater transparency concerning sustainability.

For the past three years, professionals in the financial sector have witnessed an acceleration in the regulatory changes governing sustainable finance. “Whether we’re talking about SFDR (Sustainable Finance Disclosure Regulation), Taxonomy, CSRD or changes to UCITS, AIFMD or MiFID, numerous regulations are progressively being put in place. Together, they should make it possible to integrate environmental, social and governance issues into collective investment management in a consistent and harmonized manner,” explains Stéphane Badey, Partner, Arendt Regulatory & Consulting (ARC). The various texts create a new puzzle of intertwined regulations that is difficult to understand, even if you’re experienced in managing sustainable funds. All concerned “In the hope of guaranteeing market stability, SFDR already compels all professionals, regardless of their sustainability agenda, to integrate the risks

Photo

ESG

Simon Verjus (Maison Moderne)

Antoine Peter, Manager at Arendt Regulatory & Consulting and Stéphane Badey, Partner at Arendt Regulatory & Consulting

ESG ECOSYSTEM

rules, requiring non-financial data that is currently of insufficient quality and quantity, combined with very ambitious deadlines – it is an explosive cocktail that awaits market participants as well as any industrial and commercial companies that may be seeking capital over the coming months and years. Measuring the impacts In time, the regulatory package and, in particular, the EU Taxonomy should offer precise criteria that will facilitate the identification of economic activities considered to be sustainable in environmental – and before long, social – terms. More generally, the question that the financial sector will increasingly have to answer is that of the impact, positive or negative, of the investments it makes. “Beyond the Taxonomy, notably for any economic activity not covered by it, managers of sustainable funds must include the Principal Adverse Impact (PAI) criteria to ensure that their decision does not undermine various sustainability criteria and demonstrate that their investments can indeed be considered as sustainable,” adds Stéphane Badey. The regulation aims to increase the transparency of sustainable investments, in the hope of moving the economy towards a more virtuous model. To that end, tax and other incentives will be granted in an increasingly systematic way to companies that commit to following this path. “Given the scale and complexity of the task, fund industry players must conscientiously prepare to take advantage of these inevitable changes,” concludes Stéphane Badey.

SFDR Different transparency regimes depending on the level of ESG ambition

OCTOBER 2021

now being caused by climate or social change and failures in governance,” explains Antoine Peter, Manager at ARC. It’s within this context that companies and funds are required to report non-financial information on their exposure to these new risks as well as their strategy for facing them. Meanwhile, investment fund managers have new transparency obligations to regulators and investors regarding how these risks will be incorporated into their management processes. Those who wish to go further and commit to sustainable finance have to meet additional requirements as dictated by sections 8 and 9 of the SFDR. “Although the market currently treats sections 8 and 9 as labels of sorts, they are, in fact, regulatory regimes that apply to certain funds and which provide additional transparency and reporting requirements. This increased transparency – particularly under article 8, which applies to a large number of products – should enable investors to select the funds that best meet their expectations,” says Antoine Peter. “This will become even clearer in July 2022, when the technical standards that complement the SFDR come into force, making it easier for customers to understand and compare financial products.” One of the major difficulties for financial market participants today is to understand these new rules, which are still being finalised at the European level before they are rolled out. Transparency standards may be enforced, but the data required to fulfil reporting requirements is not always available. Complex and as yet uncertain

Taxonomy Defines EU criteria for environmentally sustainable economic activities (6 objectives)

Non-financial reporting Non-financial reporting: operational target companies will need to start reporting more and more non-financial information (see NFRD / CSRD / Taxonomy)

UCITS, AIFMD, MiFID Revisions of core sectoral regulations around Operating conditions / Sustainability risks / Product governance

help an we How c

you?

ty nabili sustai dt.com @aren

Business report

OCTOBER 2021

Making an impact

2,500

2,000 2

1,500

1,000

500

2016

2017

2018

Sustainable investing

Ahead of Luxflag’s Sustainable Investment Week (11-15 October, www.luxflag.org), Delano examines three trends shaping the sustainable funds sector. We look at the future of environmental, social and governance (ESG) strategies and the challenges facing climate funds. But we begin with a snapshot of the EU’s new green investing rulebook, the Sustainable Finance Disclosure Regulation.

1 Defining

sustainability OCTOBER 2021

Taking stock of the SFDR p. 32

2 Simple vs sophisticated Sizing up ESG strategies p. 34

Collective impact

Clouds over climate funds p. 36

€1400bn

€1200bn

€1000bn

€800bn

EUROPEAN ESG FUND GROWTH Figures from Morningstar’s global sustainable fund universe, which covers funds that “claim to have a sustainability objective and/or use binding ESG criteria for their investment selection”. Source

€600bn

Morningstar Direct, Morningstar Research

urope, total net assets E Europe, estimated net flows Europe, total number of funds

€400bn

€200bn

2019

2020

2021

€0

Sustainable investing

Business report

“ Defining sustainability ”

Irina Stoliarova

ards (RTS) that provide the detailed technical guidelines on how to implement the various requirements in practice--are not yet applicable. [At the time of writing,] the draft RTS have not yet been endorsed by the European Commission. Initially it was expected that the RTS would be applicable as of 1 January 2022, however, in the beginning of July, the EU commission announ ced a postponement of SFDR RTS until 1 July 2022.

What are the top regulatory challenges facing Luxembourg fund firms, in terms of sustainable finance, over the next few years? The first regulatory challenge, undoubtedly, is the Sustainable Finance Disclosure Regulation, adopted at the end of 2019 and the high-level principle-based requirements of which are applicable as Are there other regulatory of 10 March 2021. However, the 10 March changes coming? deadline was just the first step of a long- Another tremendous innovation is defiterm sustainable finance journey and of nitely the EU Taxonomy Regulation. The SFDR implementation. Market players taxonomy intends to establish a framewill have to deal over the next years with work to classify environmentally economdifferent levels of its implementation steps. ic activities. The taxonomy is, in principle, It is important to highlight that, as of a set of rules that is independent from the now, mandatory transparency disclosures SFDR. However, for the definition of the have to be complied with by financial environmental aspect, the SFDR refers market participants only on a best effort to the Taxonomy Regulation. The taxonbasis, given that the level 2 measures-- omy also supplements the SFDR and estabthe so-called regulatory technical stand- lishes an additional layer of disclosures

TIMELINE

Key milestones in the rollout of the EU’s Sustainable Finance Disclosure Regulation. Source

First set of final taxonomy measures will apply.

1 Jan 2022

10 Mar 2021

Delano research, GSK Stockmann

All final taxonomy measures will apply.

RTS will apply.

30 Jun 2022

1 Jul 2022

30 Dec 2022 / 1 Jan 2023

1 Jan 2023

30 Jun 2023

SFDR is applicable. First principle adverse impacts (PAI) statements under regulatory technical standards (RTS) due.

PAI disclosure at product level and annual PAI reporting starts. Report on first PAI reference period.

for the financial products that follow an environmental strategy. The taxonomy will apply as of 1 January 2022 with regard to the first two environmental objectives, climate change mitigation and climate change adaptation, and as of 1 January 2023 as regards the other environmental objectives. Why is it important to have this taxonomy? Because, basically, it helps market players to understand which activities can potentially be considered as environmentally sustainable and which are not, by providing additional criteria and factors, which market participants will have to apply or will use as guidance. What should Luxembourg fund firms be doing to prepare? Put in place specific policies and processes to be efficient from an ESG perspective. It is also important to hire staff with expertise in this sector and train [them] as necessary. Data is of great importance and is a key element in this area. Therefore, financial market participants should use the current interim time to identify and try to collect the required data for reporting, required disclosures, and to put in place workflows and teams to deal with this. It is nevertheless clear that these rules are here to stay, and that sustainable finance is a long-term trend with significant opportunities for the fund industry. Mitigating the current challenges should therefore be the strategy for fund managers, by getting familiar with the new rules and taking steps to implement them as far as possible. Those that are able to do so in a cost-efficient manner are likely to be those that can benefit from the opportunities in terms of performance, growth of assets under management and reputation that sustainable finance products can bring to those players. Words AARON GRUNWALD

GSK Stockmann

Market-shifting rules are being rolled out in the EU. Irina Stoliarova, senior associate with the law firm GSK Stockmann, outlines the key dates and potential opportunities.

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FEBRUARY 2021 OCTOBER 2021

Regulation

Jeffrey Dentzer, Chief of Luxembourg Market & CIB

BILnet

Digitalisation and client support BIL set itself the goal of staying close to its clients during the health crisis and lockdowns. Alongside these support measures, the bank introduced new digital resources, and helps individuals and businesses to adopt them. Digital features that are now widely used.

At BIL, lockdown sped up clients’ adoption of digital services. Making the bank accessible from home via BILnet (mobile and web) has allowed clients to remain active. To ensure its online services benefit as many as possible, BIL has developed a support strategy aimed at all of its clients. Staying close to clients To stay close to its clients and support them proactively despite the distance, BIL has developed new features such as the possibility of a meeting with a Relationship Manager by video call. BIL has also organised webinars to

" Our goal is to use our BILnet

online banking platform as a distribution channel in its own right. "

88 % percentage of the bank’s active clients who have and use remote banking access

services whilst moving at their own pace. When they’re stuck or need expert help, personal contact remains essential” says Jeffrey Dentzer, Chief of Luxembourg Market & CIB. Going digital frees up time for bank staff, automating certain tasks so that they can concentrate on their role of Relationship Manager at key moments for the clients – individuals and businesses – such as when they are buying a property or making an investment, or starting or selling a company.

“Our goal is to make ‘digital’ a distribution channel like any other. More than ever, we want to keep supporting our clients online via BILnet, as well as in person at our branches or in our clients’ homes, thanks to the local expertise of Jeffrey Dentzer Chief of Luxembourg Market & CIB our Relationship Managers”. BIL has introduced support strategies (educational resources, tutoshare its financial analyses with its investor rials, digital coaching, etc.) to make digital bankclients and those affected by the health crisis. ing more accessible, as well as a list of useful The bank also supported those clients and sec- links and a tutorial microsite.

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tors that have been worst hit or are most at risk with moratoria and government-backed loans. More digital, more human For several years, BIL has been providing services with high added value through its Relationship Managers and digital offer, the latter of which allows clients to be more independent. “Clients have gone digital but the bank has kept its human side. They can take the initiative with certain products and

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October 2021

Sustainable investing

Business report

2 ESG strategies

Lacaille. “They have that virtue. And they’re simple for the consumer to understand: ‘I definitely won’t own companies in that area.’ I think that they’re not always the best way of dealing with issues.” Not owning shares will not shut down the company or sector, he reckons. “I think the best approach, which many have adopted, is make the right financial decision about whether it is too risky to own that company. But if you do own it, engage with the company about what you see as the future for their disclosure and future operating model. I think that’s a much more responsible way of dealing with some of the most controversial aspects, even climate, where I think it’s been successful. It’s a little bit harder to articulate as a value proposition for the consumer than a simple thing as saying, ‘right, we won’t have fossil fuel companies in the portfolio’.” That is why Lacaille believes “the way forward is really much more sophisticated ESG integration”.

Rick Lacaille

What practices do they have?’ And I think that extends naturally into the way that they’re addressing environmental management, human capital, a whole raft of things. Now five years ago, ten years ago, that consumer analyst probably wouldn’t Fund managers can take a number of have looked too much at that issue. I think, approaches--such as negative screening now, it will be unusual for them not to or positive screening--to meet ESG goals. weigh those things in the balance. And I So what tops the list? Negative screen- think there’s a generational shift in the ing is “the one that dominates and will asset management industry, in which the dominate,” says Lacaille. But a better younger participants, to put it bluntly-question is “What is the future state?” but there are exceptions to this--people His answer: “The future state is a more who have come up more recently through sophisticated version of ESG integration. the CFA programme, they’re aware that What do we mean by ESG integration? culture, society is changing, and their focus If I’m a consumer goods analyst working has changed as well. So I think that’s where Stepping up ESG integration for an active fund manager, and I’m look- the future lies in terms of best practice.” What would be more sophisticated about ing at a number of companies in the conit? “Well, firstly, better research and trainsumer goods area, I’m thinking to myself, Simplistic solution ‘how are they going to grow their revenue Negative screening excludes a negative ing. So understanding what’s material, if and their earnings in the next three to five factor like coal or tobacco from a fund. you’re an analyst, is in many ways pretty years, or even longer? What’s sustainable? The strategy is “simple,” according to obvious. If you’re an analyst in the cement business, and you think there’s going to be carbon pricing, you need to make sure that you’re positioned in low carbon cement GLOBAL GROWTH OF SUSTAINABLE INVESTING STRATEGIES companies, or those that are adopting it. Sustainability-themed investing (63% compound annual growth rate) and ESG integration (25%) It’s kind of a no-brainer. But then the have experienced the strongest growth since 2016. Norms-based screening (-10%) interesting question is, is that already in and negative screening (0%) performed less well. the price, so if the price of those low carSource Global Sustainable Investment Alliance bon cement companies is valued much more highly than the dirty ones, then is 2016 2018 2020 Impact/ community investing it going to pay off from the financial perPositive/best-in-class spective, because it’s already in the price? screening So I think the ESG integration requires Sustainability themed investing you to look at that trade-off. I could still Norms-based own a brown asset, and by engaging with screening Corporate engagement them, make it greener. And if I’m buying and shareholder action it more cheaply, well, that’s a pretty attracNegative/exclusionary screening tive combination.” ESG integration

$25.2trn $0

$5trn

$10trn

$15trn

$20trn

$25trn

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Words AARON GRUNWALD

State Street

Investment funds have several different strategies for meeting environmental, social and governance (ESG) objectives. Which ones work best? Delano asked Rick Lacaille, senior investment advisor at the banking giant State Street.

Photo

OCTOBER 2021

Simple vs sophisticated

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Sustainable investing

Business report

Collective impact Petra Besson Fencikova

where investments in “your pension fund are going”. Infrastructure vs circular economy At the same time, certain climate fund categories are garnering more attention than others. “Due to technological progress--think about renewable energies, such as wind energy, solar energy, hydropower--the financing of large energy and infrastructure projects has been functioning very well for many years, and is attracting a lot of interest, communication and appetite because it’s very visible.” On the other hand, “the weaker segment is energy efficiency” as well as “household installations, the networks for connecting renewable energies, new grids, installing charging stations, new technologies like hydrogen, that is a bit still a bit more conceptual work.” The challenge is that these placements have “return on investments that is less clear or more long term and the risks are more difficult to assess. So, these are a bit less tangible... if you’re an investor in listed equity and fixed income [instruments].” By the same token, “we need some larger efforts towards the circular economy and sustainable agriculture. We are missing some companies in this space.”

Climate funds and the idea of investors financing climate action have been gaining traction, but have not broken away from the ESG pack, reckons Besson Fencikova. “I think that we have reached the tipping point in climate change awareness,” she says. “The public, governments, companies are now aware of the necessity to act. We are all persuaded by the already tangible impact of climate change. And public opinion has also very much intensified for our own good over the last years. But concerning climate funds available to investors, we still can go further.” In her view, “it’s more the ESG funds that are now becoming mainstream, but not really specific climate funds” aligned with addressing the Paris climate agreement. That said, there is a noticeable split between institutional and retail investors. “Institutional investors are more advanced than retail investors. Retail investors still need to realise that with their investments, they can make an impact, and that it does matter where they put their money in. That if they just invest in the general indices, they would be investing in over- Common ground all economy” and not necessarily invest- “We’re seeing now that there is a lot of momentum among the asset managers,” ing in the green transition. Her message to individual investors? while “retail investors don’t yet have a nice Just like sorting recycling and switching view” of climate funds. The EU’s Sustainto energy-efficient lightbulbs, collective able Finance Disclosure Regulation could action adds up, so “you should also care help change that because “one day we are about where your money is going” and going to see the standardised reportings,”

she explains. The upshot will be “putting everyone on the same level.” The rules set “some common ground… companies will be forced to disclose some indicators and then the asset managers will need to use them. And then if you have the indicators, you can follow them, you can measure them and you can try to improve them. That’s very important.” Words AARON GRUNWALD

CLEAN RETURNS Many climate stocks are outperforming the market. Over the past three years, the S&P Global Clean Energy Index has produced total annualised returns 143% higher, and the S&P Kensho Cleantech Index 290% higher, than the benchmark S&P 500 of large US firms.* Source

S&P Dow Jones Indices

Index level $1,427.41 $640.52 $4,400.27 Year-to-date return -20.29% -20.14% 17.15% 1-year return 36.92% 48.86% 29.81% 3-year annualised return 37.76% 60.71%

15.58%

5-year annualised return 19.09% 42.10% 15.01% S&P Global Clean Energy Index S&P Kensho Cleantech Index S&P 500 * As of 18 August 2021

Société Générale

Have we reached a tipping point in climate finance, with climate funds going totally mainstream, or not? Delano asked Petra Besson Fencikova, head of ESG investments and portfolio manager with Société Générale Private Wealth Management.

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OCTOBER 2021

Climate finance

SEPTEMBER 2021

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Head to head

OCTOBER 2021

Cryptocurrencies: risky business? The global cryptocurrency market is expected to triple by 2030, from its estimated size of $1.49bn last year. But for many, the digital coins remain opaque.

Maxime Riggi is the chief technology officer of Startalers, a startup developing an inclusive investing platform aimed at women’s financial empowerment

Surveys suggest one in ten people in the US invest in cryptocurrencies, compared to just 4% in the EU. Why are investors here more reluctant? RIKIYA MASUDA In general, the European market is more conservative. People in the US are more willing to invest in a riskier asset. On the other hand, the US has more news, more information, making it easier for English speakers to learn about it. The European market is quite fragmented and that might also be preventing people from being ready to invest. MAXIME RIGGI The EU market is always the last when a new technology launches. As they start to have more maturity, maybe it’s the next big market for cryptos. Cryptocurrencies are heavily mediatised, including their ups and downs, or adopters like Elon Musk--do they have a reputation problem? MR There are so many people following [Musk] and he can just give financial advice. This is a regulation issue, not a reputation issue. In any other market, like stocks or funds, if you give this kind of advice, you will have an issue, in the US with the

“ It’s too dangerous and people can lose a lot of money”

Securities and Exchange Commission, for example. The finance world is more popular than before. We’re seeing influencers and artists talking about finance. RM Bad aspects tend to be more likely to be captured by the media. Cryptocurrencies have been associated with pump and dumps or money laundering scams, but that’s not only a problem for cryptocurrencies. We are seeing large financial institutions coming into the market and people are starting to realise that this new financial asset is something they can’t ignore. Looking at small-scale individual investors though, what do they stand to gain or lose from investing in a cryptocurrency? RM Cryptocurrency is volatile. It’s not an asset class that you can invest, say, more than 50% of your personal assets in. It all depends on your risk appetite. A certain literacy is definitely needed, but this is true for any kind of financial instrument. MR It’s a good asset to diversify with but 50% is a bit too much; maybe something like 10%. You need volatility to make profit. If you’re investing in assets where the price isn’t moving, you cannot make any money. There is opportunity in the market. Bitcoin is ten years old, Ethereum went to market in 2015. There is some stability. But it takes a lot of time to understand what you’re buying. You say cryptocurrencies are complicated to understand. There are more and more coins. How do you choose the right one? MR Do your due diligence. Who are the big investors, what companies support it? Compare different sources. If you have a goal that you’re pursuing, for example investing sustainably, maybe go with staking coins instead of proof-of-work coins that use a ton of energy. For me,

Personal finance

“ If you’re investing, there’s always a risk”

But you can buy cryptos in just MR It would be impossible if you couldn’t a few clicks, like online shopping. do anything before asking the regulator. Should there be more safeguards? The world doesn’t work like that. People MR Yes. There are some exchanges where launch new products and then comes you can just turn on the application in the regulation. We were speaking of repfive minutes and make your call with utation earlier. When things get bad, the 100% leverage. This has to be regulated. regulator gets stricter. It’s too dangerous and people can lose a lot of money. But this isn’t only an issue Could regulation help increase for cryptocurrencies. If you look at stock confidence from reluctant investors? exchange apps, they are built like casinos. RM The regulator’s job isn’t to make finanYou buy, maybe you win, maybe you lose, cial products more popular. At the same just come back tomorrow. This is not time, once we have a good foundation, more people will become ready to join investing. This is gambling. this industry, to participate in the system. RM If you’re investing, there’s always a risk to lose money, there’s always a gam- We see more institutions coming in. This bling aspect. But if a platform allows a will make the market more mature normal consumer to make 100x leverage and safer to invest in. on bitcoin, it’s not appropriate, because MR You also need to prove that it means the consumer can lose more you have good technology, resilmoney than they invested. If it’s a big ience. You must build faith, have financial institution, which is supposed a community around it, build to understand the risk, then it’s proba- trust for new assets. Silicon bly okay to provide 100x leverage. It’s Valley stocks, at the beginning, something that regulation needs to prop- were just new products. Now, erly define. they’ve been around for 20 years and we trust them. The same You have both mentioned regulation applies to cryptocurrencies. Comquite a bit. To what extent are pliance and regulation are just one regulators playing catch-up with part of the process. a market that keeps evolving? Would you recommend to your MR I wouldn’t call it catching up. They are trying to play in a market that is global, family and friends to invest in crypto? but the regulation is local. RM Absolutely. If it’s about 5 to 10%, RM The top priority for regulation is anti-money laundering. The EU already why not? has the [anti-money laundering] direc- MR Investing a little portion of money tive, which is applicable to any industry, could be interesting, but not more than including cryptocurrency. But then, how 5% of your global wealth, because this do we apply this regulation effectively? is risky. That also requires technology. From a consumer protection point of view, we have the basics. But the devil is always in the detail. What about this particular case, that particular technology? There Moderated by CORDULA SCHNUER Photos MIKE ZENARI are always new things.

OCTOBER 2021

there is a long period between the day you start gathering information and the day you really invest. RM In principle, every investor is supposed to do their due diligence. In reality, people don’t spend that much time and there’s simply too much information out there. What should be done, and what is happening, is that as an exchange, we have a listings committee and we do proper due diligence, working with the regulator.

Rikiya Masuda is the chief financial officer of Bitflyer in Luxembourg. Headquartered in Tokyo, the company set up its EU office in 2018

OCTOBER 2021

Essay

514 votes that changed the world

On 9 October 2011 the results of the Luxembourg City municipal election effectively handed Xavier Bettel the mayorship of the capital city, as he edged out incumbent Paul Helminger by just over 500 votes. The long-term impact of that election was significant, and a decade later Bettel is enjoying his second term as prime minister.

Words DUNCAN ROBERTS Illustration MARIELLE VOISIN

Photos

Julien Becker, Jock Fistick, Matic Zorman, Mike Zenari

Eleven years after just 537 votes in Flor- all before him at the 2005 local elections. change), while the three parties had no ida were decisive in the 2000 US presi- His personal tally of votes in 2005 was formal agreement to attempt to form a dential election, giving George W. Bush over 5,000 more than Bettel and almost coalition before the election, that trio of the edge over Al Gore in the electoral 4,300 more than Polfer, who was return- leading lights--alongside Félix Braz for college, a similarly small margin proved ing to local politics after the DP had to Déi Gréng and Claude Meisch for the instrumental in changing Luxembourg surrender its government mandate fol- DP--were friends and shared vaguely and European politics. On 24 November lowing the 2004 general election. similar world outlooks. Most importantly, 2011, at the age of 38, Xavier Bettel became especially after what Juncker would later the youngest mayor of Luxembourg City National stage call “a chain of unfortunate coincidences”, since Lydie Polfer first stepped into the But six years later, for several reasons, they were determined to bring down the role at the age of 29 in 1982. Bettel, rep- Helminger’s popularity was on the wane. long-serving prime minister and oust his resenting his Democratic Party, had Not just among the electorate in general CSV party from power. received 13,928 votes at the 9 October but also among his own party’s memberThe most significant of those unformunicipal elections, beating the incum- ship. So, when Bettel scored more person- tunate coincidences that Juncker spoke bent and lead candidate of the DP, Paul al votes than Helminger at the 2011 election, of was, of course, the scandal surroundHelminger, by just 514 votes. the incumbent’s days were numbered. ing the secret service and the parliamenIndeed, following Helminger’s death Bettel’s style of leadership contrasted tary investigation into how it had basically earlier this year, Bettel’s tribute in the with his predecessor’s. With 33 years of been operating without any supervision Chamber of Deputies, on 23 April, included youth on Helminger, Bettel was more from the minister who was supposed to an acknowledgement of the impact of energetic and spontaneous--a style he be in charge--Juncker himself. Bettel, who was a member of the parthat election. “I would not be standing has continued as prime minister. And in in front of you today as prime minister François Bausch (whose Déi Gréng had liamentary committee investigating the if, in 2011, Paul had not given me the maintained their coalition in the city), secret service, played another blinder. chance to become mayor of this city. I Bettel had a deputy who straddled the Bumb’s book describes how Bettel had will never forget that,” Bettel said. two generations and, crucially, shared recognised very early on how far-reachSome would argue that the premier his ambitions to make a mark on the ing the enquiry would be and how he, “secretly, quietly and without giving any was being disingenuous in suggesting national stage. that Helminger’s handover was entirely Bettel and Bausch would get their reason”, gave up his seat on the commitvoluntary. Indeed, the words “unscrupu- chance to make good that ambition just tee in favour of Polfer. “That is how the lous” and even “ruthless” have been used two years later at the hastily called 2013 leader of the DP consciously withdrew to describe the way that Bettel assumed parliamentary elections that resulted from the imminent party political power in the city. It would not be the last when then-prime minister Jean-Claude mud-slinging,” Bumb writes. Come election day, that strategy time that Bettel displayed his ambitious Juncker decided to dissolve parliament streak that, with the aid of others, helped rather than face a vote of no confidence appeared to have paid off. The CSV was bring down the reign of an incumbent he knew he would lose without the sup- apportioning blame on its erstwhile coaleader. Just two years later, he was the port of his LSAP coalition partner. The lition partner the LSAP for the betrayal prime minister of Luxembourg. shiny new star of the LSAP, minister of that had led to the collapse of the Juncker Even though he has dismissed claims the economy Étienne Schneider, proved government, leaving voters disillusioned that he had always had ambition to lead to be a vital ally of the city politicians. with the two government parties. “There As Christoph Bumb points out in his is only one clear winner of this election, the country, Bettel showed a keen interest in politics from an early age. Even insightful book Blau Rot Grün – Hinter and that is the DP,” Bettel said in the immebefore he was elected to the Luxembourg den Kulissen eines Machtwechsels (Blue diate aftermath of the result that gave his City council at the age of 26, he was seen Red Green: behind the scenes of a power party five additional seats and saw the out and about glad-handing at events and forging contacts in a style reminiscent of Lydie Polfer during her first time as mayor. Bettel’s personality and charm marked him out as one to watch in the LUXEMBOURG CITY LOCAL ELECTIONS late 1990s, even if back then the notion Individual votes for DP candidates of a DP prime minister seemed quite farfetched. His profile rose even more when 2005 results 2011 results he hosted a regular Sunday evening talk Paul Helminger Xavier Bettel show for the now defunct T.TV, run by 16,181 13,928 mobile operator Tango, in 2004 and 2005. Anne Brasseur Paul Helminger Even so, it was a surprise that Bettel 12,605 13,414 performed so well at the 2011 communal Lydie Polfer Lydie Polfer elections. Helminger, who had taken over 12,090 11,807 as mayor from Polfer in 1999 (when she Xavier Bettel 11,031 entered national government), had swept

OCTOBER 2021

Politics

Essay Politics

What if… But what might have happened if Helminger had won 515 more votes in the 2011 municipal elections? For starters, without the media visibility that two years as mayor afforded him, Bettel would not have been the natural leader to front the DP’s 2013 election campaign. Not only may that have impacted the party’s excellent results, but the DP old guard under the influence of the likes of Charles Goerens (who had served in government under Juncker) may not have succumbed so readily to the overtures of Schneider and his ambition to oust Juncker and the CSV at all costs. Knowing that the LSAP was in steady decline, as left-of-centre parties were all over Europe, the DP may even have looked ahead to the 2018 elections and sought to forge a coalition with Juncker in the hope that it could retain its place in government for longer than one term. There would almost certainly have been no referendum on allowing foreigners to vote, which proved a disaster for the Bettel government and only served to embolden nationalists like Fred Keup, now of the ADR. And there is no way that the CSV would have pushed through acts that have led to the separation of church and state. On the other hand, the CSV may have made good on its 2013 election promise to include more participation from civil society on the continually troubled reform of the constitution. As it is, the CSV has now been out of power for eight years and recent statements from its leader Claude Wiseler about “asylum tourism” in the wake of the Afghanistan humanitarian crisis indicate it is lost and lurching to the right in a desperate attempt to lure voters that can, ultimately, only fail. And, despite alienating small business entrepreneurs early on during the covid

THE RISE OF XAVIER BETTEL 1988 Joins the DP party 1994 Elected president of the JDL, the DP’s youth wing 1999 August: after placing 10th on the DP list at the general election in June, Xavier Bettel is sworn in as an MP as a result of other DP candidates move into government. October: Placing 6th on the DP list, Bettel is elected to the Luxembourg City council 2004 Bettel retains his seat as an MP 2005 Bettel places 4th on the DP list and is made an alderman in Luxembourg City 2009 Bettel retains his seat as an MP and gets the second most votes of any DP candidate 2011 Wins the most votes in the Luxembourg City local election and is made mayor 2013 Becomes prime minister, heading a coalition of DP, LSAP and Déi Gréng

pandemic, Bettel remains very popular among voters and especially with those not born in the grand duchy. But the consequences stretch beyond Luxembourg. Defeat at the polls in 2013 allowed Juncker to throw his hat into the ring to be the Spitzenkandidat for the EPP faction at the 2014 European Parliament elections, which would lead to him being appointed president of the European Commission. If he had remained as prime minister, there is little chance, despite his long-standing and burning ambition to head up the commission, that he would have resigned after less than one year in the job, especially after coming so close to losing his mandate. If Juncker had not been the EPP lead candidate, that role would have fallen to Michel Barnier. As commission president,

the Frenchman, who had earned the nicknames “Mr Smooth” and “the Silver Fox”, may well have handled prereferendum talks with then UK prime minister David Cameron quite differently--though it would have required a miracle to persuade the other 27 members to give the UK even more concessions. Although the likes of the Daily Telegraph had once labelled Barnier “the most dangerous man in Europe” when he was trying to reform the financial sector back in 2010, he had a reputation as a skilled negotiator and a suave diplomat, someone who got things done. Certainly, his style was different from Juncker, who was seen by many as “the incarnation of federalist pro-integrationism and traditional ‘behind-closed-doors’ decision-making”, according to University of Münster professor Olivier Treib. Juncker, reflecting on his time as commission president, often said he regretted not getting involved more in the referendum campaign for the UK to remain in the EU--a mistake that one cannot help but think Barnier would not have made. And even though they could have attacked Barnier for all sorts of political reasons, there are few flies on the Frenchman that the UK’s more Eurosceptic media could have used to personally attack him in the way they targeted Juncker’s drinking problem. Might the referendum result have been different with Barnier at the helm in Brussels? It seems unlikely, but we will never know. But one thing is certain, Luxembourg and EU history would have been very different if Bettel had not won that 2011 election. The narrow margin of his victory--like that in Florida 11 years earlier--is proof that every vote counts.

Sources Blau Rot Grün: Hinter den Kulissen eines Machtwechsels by Christoph Bumb Berlin Policy Journal (19 May 2017): Close Up: Michel Barnier by Dave Keating LSE Blog (9 August 2014): Excluding the growing camp of Eurosceptics from the EU’s corridors of power could prove fatal in the long run by Olivier Treib

Christophe Olinger

CSV lose three seats, even if it retained its status as the most popular party. In a parliamentary system that relied on coalitions, Bettel knew that he was the kingmaker and from that stage on there was only one head upon which the crown would eventually settle--his own. The LSAP, DP and Déi Gréng could and did quickly form a majority--the so-called Gambia coalition (the red, blue and green party colours mirror the Gambian flag)--and the rest, as they say, is history.

Photos

OCTOBER 2021

How to regulate crypto-assets without killing them Luc Falempin (Tokeny) Nadia Manzari (Schiltz & Schiltz)

Laurent Kratz (Neofacto Luxembourg)

Nasir Zubairi (LHoFT)

W E D N E S DAY Come and join the four leading voices: Nadia Manzari, Nasir Zubairi, Laurent Kratz and Luc Falempin and hear their insights about how one can regulate crypto assets without suffocating the very innovation crypto was invented to enable. Trading crypto happens on centralized and decentralized exchanges. Centralized is easier to regulate as there is a legal entity that owns the platform and thus is liable. Decentralized is more discreet and enable crypto-to-crypto trading. Decentralized exchanges are often governed by policies or statutes as selected by holders of the asset that is traded on the exchange, but are the traders aware of the rules they are subject to?

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OCTOBER 2021

Go meatless! October is for vegetarian awareness, an ideal time to try a meatless dish or an endless variety of vegan menus. 1 Beet The vegan Thai salad made with rice noodles, peanuts, paprika, lemon and paired with a savoury ginger-garlic peanut butter dressing is an irresistible alternative to a classic Thai beef salad.

3 Kyosk The “tartare de betterave” or beet tartare consists of beetroot and tarragon garnished with sauce made of soy cream, mustard, ketchup, agave nectar and lemon. It can be served with pickles, red onions, capers and fresh chips.

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2 Green Olive Packed with nutrients, it’s no surprise that the buffet style green olive mix is unrivalled as the most ordered dish at Green Olive. Ingredients include hummus, falafel, grape leaves, potato / broccoli pancake, rice and more. www.green-olive.lu

Words ABIGAIL OKORODUS Photos ROMAIN GAMBA

“I would not buy meat that costs €5 a kilo because that’s totally irresponsible.”

4 Nirvana Café The exotic taste of the Indian vegan Chole Bhatura combines chole, made from chickpea curry spiced with chilli, cloves, roasted fenugreek and cardamom, with bhature, a crispy unleavened bread. It can be served with vegan yoghurt.

OCTOBER 2021

Luxair CEO Gilles Feith

essert h d a an

s ck

Veg

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5 Snack in Joy Switching to a meatless diet does not mean giving up on burgers. The signature 100% vegan Joy burger merges tastiness and fun with its orange vegan bun containing 25% pepper and the option of pure vegan cheddar. www.snackinjoy.com

A healthier alternative to regular desserts and just as yummy. Go a step further with vegan desserts, a must for October!

1 Brownies and cookies Make a fine batter with vegan substitutes. Mashed bananas, flax “eggs” or applesauce can replace eggs, and instead of butter use your favourite oil to maintain a great texture.

The aubergine teriyaki poke bowl is a rich and flavourful plant-based menu that includes caramelised aubergine with teriyaki sauce, pomegranates, soya beans, pickles, carrots and more. www.victorine.lu

3 Cakes Indulge your sweet tooth with vegan cake mixes, but don’t forget to use veganfriendly options for eggs and butter.

4 Puddings Add a creative touch using avocado as a great base or corn starch as a thickener.

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Victorine

Photo

Ice cream Ditch dairy but still enjoy a creamy dessert with non-dairy milk, endless frozen fruit recipes, not to mention cashew nuts.

Welcome to the Club

Business Club

OCTOBER 2021

In numbers

Flashback Your events

1,300

The summer of 2021 will be remembered for being “back to live” with the return of live events, networking, food, drinks and the occasional sunshine! Delano celebrated its 10-year birthday and editor-in-chief 1 Duncan Roberts demonstrated his cake-cutting skills. Our summer CEO cocktail, held in the residence of the 2 Japanese ambassador, combined sushi, sake and technology, reconnecting Luxembourg decision makers such as 3 Nasir Zubairi (LHoFT) and 4 Nicolas Henckes (CLC). Following the successful Top 100 event last winter, 5 François Génaux (PwC) interviewed 6 Sasha Baillie (Luxinnovation) on how they were enabling Luxembourg to become a better place for startups and helping local companies to export.

COMPANIES The number of company members of the largest business club in Luxembourg.

18,000 MEMBERS

The number of individuals who are part of the vibrantly active Paperjam + Delano Club community with whom you will get to interact.

383

EVENTS The number of digital and on-site events. Choose from about 400 conferences, training, networking and workshop events each year.

" [Digitalisation] is definitely the logical solution, if not the miracle solution. " Sumit Roy

500

Quantum Business Advisory Lux

HOURS

The number of annual training hours for your employees to develop their hard and soft skills: an additional benefit for you and useful extras for your teams.

HOW TO ATTEND PAPERJAM + DELANO CLUB EVENTS ? You’re already a member Please check the Club section on our website paperjam.lu. Select, among all the digital and on-site events listed, the ones you would be interested in, fill in the registration form at the bottom page and register.

You’re not a member yet Please email the Paperjam + Delano Club via club@paperjam.lu and an account manager will get in touch to introduce you to all the perks offered by the largest business club in Luxembourg.

Programme September-November

OCTOBER 2021

Tuesday 28 September

Start-up Stories (4/4) TIME 18:30 – 20:00 LOCATION The Cube – Maison des Arts et des Étudiants SPONSORS Office Freylinger, Start-up Luxembourg Thursday 21 October 3

10×6

3 3

Entrepreneurship: 10 CSR Strategies TIME 18:30 – 22:30 LOCATION Athénée de Luxembourg SPONSORS INDR, PwC

Wednesday 17 November

" Our pleasure is greater because we have so many representations of Japanese culture. " Jiro Okuyama Japanese ambassador

How to regulate crypto-assets without killing them? TIME 18:30 – 22:30 LOCATION ARHS Building SPONSOR LHoFT

Photos

Simon Verjus

CLUB TALK

011 BY MIKE K N2 OE DI DI DE

N GE

FO UN

OCTOBER 2021 EDITION PUBLISHING DIRECTOR

OCTOBER 2021

Mike Koedinger EDITORIAL DEVELOPMENT DIRECTOR

Editorial Phone (+352) 20 70 70-150 E-mail news@delano.lu DESK EDITOR

Aaron Grunwald (-152) JOURNALISTS

Teodor Georgiev (-158) Abigail Okorodus (-155) Jeffrey Palms (-156) Cordula Schnuer (-163) COMMUNITY MANAGER

Christophe Lemaire PHOTOGRAPHY

Romain Gamba Mike Zenari Matic Zorman

Nathalie Reuter EDITOR-IN-CHIEF, DELANO MAGAZINE

Publisher

Natalie Gerhardstein (-154) EDITOR-IN-CHIEF, DELANO DIGITAL

Duncan Roberts (-151)

Brand Studio Phone (+352) 20 70 70-300

www.maisonmoderne.com Phone (+352) 20 70 70 E-mail publishing@maisonmoderne.com

DIRECTOR

FOUNDER AND CHAIRMAN

Youcef Damardji

Mike Koedinger

STRATEGIC BUSINESS DEVELOPMENT ADVISOR

CEO

Francis Gasparotto (-301)

Geraldine Knudson

HEAD OF MEDIA SALES AND SOLUTIONS

ADMINISTRATIVE AND FINANCIAL DIRECTOR

Dominique Gouviaux (-338)

Etienne Velasti

COMMERCIAL ASSISTANT

Maison Moderne is a partnership between Francis Gasparotto, Mike Koedinger and Etienne Velasti.

Céline Bayle (-303) MEDIA ADVISORS

Nicolas Galtier (-318) Mélanie Juredieu (-317) Virginie Laurent (-322) Aline Puget (-323) Léo Santoro (-335) Mikaël Spezzacatena (-326) HEAD OF CONTENT STRATEGY

Emmanuelle Thivollard CREATIVE DIRECTOR

Jeremy Leslie TRAFFIC MANAGER

Sandrine Papadopoulos ART DIRECTOR

José Carsí LAYOUT

Sophie Melai (coordination), Stéphane Cognioul, Juliette Noblot, Marielle Voisin

PUBLISHING DIRECTOR

Mike Koedinger STRATEGIC BUSINESS DEVELOPMENT ADVISOR

Francis Gasparotto DEPUTY DIRECTOR, BUSINESS CLUB

Ana Wiscour-Conter CHIEF DIGITAL OFFICER

Viktor Dick HR MANAGER

Sylvie Notarnicola ADMINISTRATIVE MANAGER

Sylvia Leplang DIGITAL PROJECT MANAGER

Meryem Alamy DISTRIBUTION MANAGER

Kévin Thirion IT MANAGER

Matthew Dixon

ILLUSTRATIONS

Marielle Voisin

To contact staff members SEND AN E-MAIL TO

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Maison Moderne is committed to reducing its ecological footprint. Delano magazine uses CO2 neutral printing, Blauer Engel recycled paper for its cover and FSC® certified sustainable paper for interior pages. Please recycle. Have you finished reading this magazine? Save it, pass it on or recycle it!

In accordance with article 66 of the law of 08.06.2004 on the freedom of expression in the media, the following statement is obligatory “one time per year, in the first edition distributed”. We have decided to publish it each month. The company that publishes Delano is indirectly held, by a stake exceeding 25%, by Mike Koedinger, a publisher registered in Luxembourg. Geraldine Knudson is chartered with general and daily management.

OCTOBER 2021

Monthly subscriptions on eshop.maisonmoderne.lu

Expat Guide

11 issues/year

Supplement Deep dives into hot topics

Published each summer for newcomers

NEXT EDITION: NOVEMBER 2021

NEXT EDITION: JULY 2022

Business Club

Delano.lu

Networking, workshops and a variety of events. Learn more on paperjam.lu/club

Business, finance, politics and more each day

ECOSYSTEM

Newsletters

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Find the latest listings on jobs.delano.lu

Podcasts

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Pick’n’mix

Climate concerns

Ilana Devillers

Viviane Wirtz

Stefan Glober

Tifenn Eyraud

Charles-Albert Florentin

FOUNDER AND CEO, FOOD 4 ALL

CEO, LETZWASH

FOUNDER, GLOBER & PARTNERS CONSULTING

BOARD OF DIRECTORS MEMBER, OUNI

CLEANTECH CLUSTER MANAGER, LUXINNOVATION

Company carbon footprint: 32 tCO2e*/year

Company carbon footprint: 8 tCO2e/year

Personal carbon footprint: 3.66 tCO2e/year

Personal carbon footprint: 4.22 tCO2e/year

Personal carbon footprint: 3.93 tCO2e/year

[With] the recent weather, endless rainfall and excessive temperatures within a few days, we no longer have time to doubt.

Most scientists say that 90% of climate change is caused by human activity. [Just] objectively observe the recurring weather patterns.

Even if you don’t believe in it, adopting ecological resolutions improves your well-being and your social life.

Read the Grist article “‘There is no evidence’ — Yes, there is”, which provides a lot of arguments. Above all, open your eyes, look out your window.

I go to the supermarket daily to only buy what I need and to avoid food waste at home.

We try to save as much food as we can at a supermarket level, to reduce food waste and save the planet. Reduce our CO2 emissions, the main cause of the Overshoot Day taking place on 15 February… we must change this immediately.

It’s never too late to try to make a difference for the environment, especially if everyone contributes a little. Bottom-up and top-down approaches are the ones needed for climate action.

I favour local, seasonal products while drastically reducing plastic and meat. I buy second-hand whenever possible.

LetzWash only offers ecological, organic and concentrated products, with 80% less plastic.

The reduction of CO2 emissions and raising awareness on renewable energies.

Really? Please, just open your eyes!

Buying local food products regularly, cooking them at home, composting and avoiding food waste.

Cycling wherever possible and loving it.

I don’t have a car and I don’t fly.

Taking a focused, practical approach to energy efficiency improvements of buildings old and new, enabling access to a wide range of subsidies.

Ouni is spreading the zero-waste, local and social commitment message beyond the doors of its stores, thanks to its members.

The cluster generates collab projects and works with companies in reuse/ recycling projects, i.e., construction.

Overuse. Reuse rather than throw away, buy only what you really need.

Optimised water and soil management, and biodiversity conservation.

It’s never too late to act, even if we won’t escape the consequences of certain weather conditions that originated decades ago.

Both. Clear support and direction from governments, and highand low-tech innovations from businesses and individuals.

Fuel pricing needs to reflect CO2 impact, and safer cycling infrastructure.

No, but we have 10 years to drastically change our lifestyle.

Never too late.

It’s late--this can be seen in the increasingly frequent ecological disasters--but I hope it’s not too late!

All actors, public and private, must be engaged and put pressure on governments and on the most polluting industrial activities.

It has to be top-down at this late point, but also needs clear communication to bring along as many as possible.

Consumers have real power, but we can’t afford to wait; it’s time for politicians to take concrete measures now.

* tCO2e tonnes of carbon dioxide equivalent Photos Provided by participants, Andrés Lejona, Marion Dessard, Michele Jamrozik, Shutterstock

Bottom-up or top-down climate action approach?

Is it already too late to act?

The most urgent climate-related issue for Luxembourg?

How your business contributes to an eco-friendlier Lux?

A personal routine adopted to reduce emissions?

One message for climate change sceptics?

OCTOBER 2021

June was a tad warmer, July came with floods, and August was too cold. Key actors react to weather changes, which are increasingly apparent.

WE OFFER TAILOR-MADE SOLUTIONS Claude HIRTZIG

Banque et Caisse d’Epargne de l’Etat, Luxembourg, établissement public autonome 1, Place de Metz, L-2954 Luxembourg, R.C.S. Luxembourg B30775

www.atoz.lu

Your business is unique. Your tax advice should be too. Over 15 years of leadership.

Founder & Member of the world’s largest independent tax network