Home Europe Eurex Enables global ESG Investing with MSCI Indices

Eurex Enables global ESG Investing with MSCI Indices

Following the worldwide trend towards responsible investing, Europe’s largest futures and options market has expanded its ESG segment to markets outside of Europe in a move to support asset managers in their switch to sustainable investing. As of March 2, five new Eurex futures will cover sustainable versions of key regional and global MSCI benchmarks.

Trading in MSCI index-based derivatives is one of the fastest growing segments at Eurex. The share of client business driven by institutional investors has nearly doubled within the last two years and now represents 27% of turnover. Eurex’s MSCI index-based derivatives offering is the broadest worldwide to be tradable on a single platform, with 120 MSCI index-based futures and 20 MSCI index-based options currently listed. Total open interest is approximately 2.5 million contracts, which is the world’s highest MSCI index-based derivative-related open interest. 

The new contracts complement Eurex’s previous ESG offering, which mainly focused on European markets, and include ESG-screened versions of MSCI indexes covering the US, emerging markets, developed markets outside the US and Canada (EAFE), Japan and the world. “Our aim is to set the agenda in ESG and to offer investors the greatest possible flexibility in their global ESG investments,” says Michael Peters, Member of the Eurex Executive Board.

Carolyn Weinberg, Global Head of Products for ETF and Index Investments at BlackRock, adds: “The new Eurex ESG futures reflect the growing demand for sustainable benchmarks on a global scale. The transparency of sustainable indexing methodologies empowers financial markets participants to articulate their risk preferences. The extension into derivatives is significant as sustainable indices are used as financial instruments.”

The underlying MSCI ESG Screened Indexes follow a negative ESG screening or exclusions methodology, which reflect investors’ most common concerns. Exclusions aim to help avoid stocks that carry reputational risk and are considered controversial. This filters out components from a standard MSCI benchmark – such as controversial weapons companies, tobacco manufacturers or companies deriving revenues from thermal coal, as well as companies not complying with UN Global Compact Principles.

The move follows the launch last month of additional ESG futures with the STOXX Europe 600 ESG-X Index Futures (FSEG), taking the number of ESG derivatives listed on the exchange to over 700,000 contracts with a notional value of over €10 billion traded. 

Most Popular

CALL FOR INTEREST: FAIRR Launches New Investor Engagement Opportunities

US$20 trillion investor network FAIRR is for a limited period opening up two unique engagement initiatives to interested new...

CBI’s Sean Kidney: COVID-19 could teach us how to better respond to the climate change challenge

Join us for the latest Ethical Intelligence Podcast with Climate Bonds Initiative (CBI) CEO Sean Kidney, in which we delve deep...

Shipping and the ‘S’ in ESG

In the second of our three-part ESG in Shipping series, Tony Foster, CEO and Chief Investor Officer of Marine Capital, explores the social...

World Bank launches first sustainable development notes linked to UN Global Compact signatories

WASHINGTON DC: The World Bank today announced plans to issue, for the first time, US dollar-denominated sustainable development notes that provide investors...

UN PRI adds new private equity members

The UN Principles for Responsible Investment (UN PRI) has appointed five new signatory representatives to its private equity advisory committee.

INSIGHT: Get ready for the EU Green Taxonomy with Impact Cubed’s Arleta Majoch

“Sustainability creates the opportunity for a lot of beautiful storytelling – imperfect as the taxonomy may be, it addresses a real need...

Rio Tinto Pledges US$1 billion to Climate Change Targets

Rio Tinto, one of the world's largest metals and mining corporations, this week announced plans to invest around US$1 billion over...

UN PRI: Support Sustainable Companies Through the Coronavirus Crisis, Even if it Means Sacrificing Returns

The UN PRI has issued a statement on the ongoing global Coronavirus crisis, in which it urges investors to support sustainable...

Credit Suisse Appoints Phineas Glover Head of APAC ESG Research

Credit Suisse has appointed Phineas Glover as Head of ESG Research for Asia-Pacific, based in Sydney, Australia. Glover joined the bank in April...

World Economic Forum Releases Framework to Help Business Identify ESG Factors for Long-Term Resilience

ESG factors with financial impact on a company can change over time; identifying these factors before they arise is important for...

Shuen Chan To Lead ESG For LGIM Real Assets

LGIM Real Assets (a division of Legal & General Investment Management) has appointed Shuen Chan as Head of ESG, reporting to...

In Other News…

Welcome to your end-of-week round-up for November 18-22, bringing you the 'best of the rest' - all the top stories that didn't...

Formuepleje Launches New Better World Fund, Hands Management to Impax

Denmark's largest independent asset manager, Formuepleje, has listed the second fund in its Fortune Care Better World universe, following the debut Better...

ESG A New Growth Frontier for Global Asset Managers, Says Moody’s

The rise in ESG investing reflects a shifting consumer preference that has the potential to drive exponential and enduring growth in...

Deutsche Bank WM to Expand ESG Team

Deutsche Bank Wealth Management is expanding its wealth advisory service and growing its ESG strategy on the back of client demand, according to...
Stay updated

Get the most relevant ESG
updates delivered direct to
your inbox every week.
Sign up now
to the Ethical Intelligence

Stay updated with all the latest ESG news & much more.
Welcome to Ethical Intelligence!  We are delighted you are here, and we hope you enjoy our approach to ESG information.  Just to let you know, we are a subscription site, so you are welcome to read up to 10 of our informative ESG articles with no charge.  After that, we ask you to sign up for one of our very reasonably priced subscription packages.  You can do that via the subscribe button on the main menu below, or from the subscribe page you will see after your 11th article click.
Social Media Auto Publish Powered By : XYZScripts.com