![](\"https:\/\/assets.bwbx.io\/images\/users\/iqjWHBFdfxIU\/idf9Jryyfb1Y\/v2\/488x-1.png\")
<\/div>\n<\/figure>\nThe green bond market is predicted to reach almost $72 billion this year, up from $48 billion in 2015. It is largely unregulated. Issuers can choose to follow voluntary guidelines such as the Green Bond Principles or the Climate Bond Initiative, but there are no mandatory rules except in China<\/a>. There have been some instances of funds raised from climate-friendly debt going to controversial projects<\/a>. The City of London has preemptively assembled a team of lawyers to deal with such cases.<\/p>\n In spite of this, many institutional investors want to shift funds into climate-friendly investments, particularly after the success of the COP21 agreement in Paris last year. The Institutional Investors Group on Climate Change<\/a> has 120 members with 13 trillion euros ($14.6 trillion) in assets. The organization tries to identify opportunities and manage risks associated with global warming.<\/p>\n The LGX is seeking to be more than just a green bond exchange. Scharfe envisions environmentally-focused exchange-traded funds and dedicated sustainability funds listing. He also expects green structured products to come to market.<\/p>\n The exchange will not set rules for what makes up a green security. It plans to have instruments with \u201cdifferent shades of green\u201d and allow investors to choose what matches their internal policies, based on the mandatory level of disclosure for issuers. It will also let companies pick how they report this information.<\/p>\n \u201cThere will not be a standardized reporting method because there are no standards in the market yet,\u201d Scharfe said.\u00a0\u201cWe decided that rather than determining that reporting needs to be done under a certain form, we are obliging issuers to provide the full set of documentation.\u201d<\/p>\n