The derivatives exchange Eurex has doubled down on its commitment to socially-responsible finance by launching adding its first exchange-traded environmental social and governance (ESG) options on a European benchmark to its product range.
Broadly, ESG is an umbrella term for investments that seek to achieve positive financial returns while also contributing to improving society and the environment.
The launch of Eurex’s new options, which are based on the new STOXX 600 Europe ESG-X Index, is scheduled for 21 October.
Eurex noted in a statement that the options will further complement its STOXX Select products with futures and options that capture the performance of European companies with high dividend payments, low volatility and a relatively high ESG score.
In February, Eurex claimed to be the first exchange to introduce an ESG product- suite of three futures based on European benchmarks.
In a statement on the launch, Eurex said the three futures on the highly-liquid European STOXX benchmarks covering ESG exclusions (low carbon and climate impact) support market participants to manage sustainability-driven challenges,
Seven months after their launch, STOXX Europe 600 ESG-X Index Futures (FSEG), which Eurex says are by far the most popular contracts, have reached over 362,000 traded contracts with 55 percent of the flow coming from end clients and asset owners.
During the peak of the most recent roll period, open interest reached 85,000 contracts worth €1.2 billion notional value, according to Eurex.
“Options are the next logical step to extend our ESG offering on European benchmarks," said Eurex executive board member Michael Peters.
"As market feedback on our sustainable derivatives is very positive, we will continuously expand our product range closely aligned to the needs of our clients.”
Andrew Fisher, managing director at Goldman Sachs, added: “With the market becoming increasingly focused on sustainable investing, we are excited by this new initiative from Eurex and look forward to bringing these new products to our clients.
"We believe these options will offer market participants a good toolkit to manage their risk as the market grows in this area.”
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