Electronic fixed income trading platform MarketAxess, which also provides market data and post-trade services for the global fixed-income markets, has charged into the sustainable space with the launch of its new ‘Trading for Trees’ incentive program and the rollout of new capabilities designed to streamline clients’ trading and sustainable investing in Green bonds.
The Green Bond initiatives follow a 108% year-over-year increase in global Green bond trading activity on MarketAxess to over US$19 billion in 2019. This growth is amid record growth for Green bond issuance in 2019, and a continued focus on sustainable investing in ESG bonds and bond funds.
TRACE-reported trade volume in bonds financing environmentally friendly activities rose to over $57 billion in 2019, up from nearly US$30 billion in 2018. With a 15% share of trading in these issues, MarketAxess currently ranks as the largest Green bond marketplace in the US.
The platform is partnering with the global reforestation charity One Tree Planted on its trading incentive program. Through the ‘Trading for Trees’ program, which launched at the start of January 2020, five trees will be planted for every US$1 million of Green Bond trading volume executed on the MarketAxess platform, further encouraging clients and dealers to enhance their ESG investment goals. Under the program, institutional investor and dealer clients will get credit for planting trees in the Amazon, Australia and other critical regions while fulfilling their ESG investment strategies. Based on global historical trading activity, MarketAxess expects the Trading for Trees program to plant over 100,000 trees in 2020.
“As one of the world’s largest electronic trading platforms with a global community of participants, we are ideally positioned to enhance our clients’ trading in this fast-growing Green Bond market,” says Chris Concannon, President and Chief Operating Officer at MarketAxess. “We recognise that our company can do even more to support environmentally responsible investing through the launch of our ‘Trading for Trees’ incentive program and new Green Bond trading functionality. These initiatives reflect the values and commitment of MarketAxess and its employees worldwide by combining support for our clients’ sustainable investment activities with direct action to benefit the environment.”
To make it easier for clients to identify specific bond issues and access liquidity to meet their ESG strategies, MarketAxess has also incorporated new Green bond-related trading functionality: including flags to easily identify Green bonds, issuers and dealers, a watchlist functionality to provide a snapshot of Green Bond market activity, an enriched ‘Like Bonds’ tool to identify Green bonds with similar characteristics as non-Green bonds, and enhanced Smart Dealer Select functionality to identify dealers that are providing liquidity in Green bonds.
“As an active Green Bond investor, ease in identifying securities and sourcing qualifying issues is helpful in managing our growing sustainability focused funds and adds further support to this nascent but growing asset class,” notes Ashley Schulten, Head of Responsible Investing, Global Fixed Income at BlackRock.
“We expect this comprehensive market ecosystem with dealers, brokers, and market participants will create a deep and prevailing market,” adds Russell Investments’ Global Head of Trading, Jason Lenzo. “As market participants and stewards of our environment, we also believe it’s critical to support such sustainability initiatives.”