Stockholm (NordSIP) – STOXX and Eurex have announced that the STOXX USA 500 ESG-X Index will be licensed as an underlying for listed futures on the international derivatives exchange Eurex starting on February 10, 2020.
The rollout of this new index is timed to match the one-year anniversary of the launch of the first ESG futures index, the STOXX Europe 600 ESG-X Index Futures, and is meant to expand Eurex’s global ESG product range.
The STOXX USA 500 ESG-X uses a free-float market cap weighting similar to its parent index. Products in the ESG-X index family are created by screening benchmarks for controversial weapons, tobacco and thermal coal, violators of the UN Global Compact principles of human and labour rights, the environment, business ethics and anti-corruption. Sustainalytics provides the underlying ESG used in the screening process.
“Driven by the growth of ESG assets, the strong demand from both retail and institutional investors, and the overall dynamics of the market, we want to give our clients maximum flexibility when it comes to selecting their ESG investment approaches,” commented Michael Peters, Member of the Eurex Executive Board.
“The Eurex STOXX USA 500 ESG-X futures will be the first listed derivative covering the US market which includes a screening for thermal coal mining and coal-fired power plants,” said Willem Keogh, Head of ESG and Thematic Solutions at Qontigo, STOXX’s mother company. “The STOXX ESG-X family was developed based on the feedback of European asset owners, and this important screening is a very relevant feature as investors look more closely at their climate-related risks.”
“Because we were looking for tradeable benchmark indices which are compliant with our responsible investment policy,” says Magnus Linder, Head of Derivatives at Swedbank Robur, one of Scandinavia’s largest asset managers. “We were involved in the development of the ESG-X index family and were among the first to trade Eurex futures on the STOXX Europe 600 ESG-X Index. Liquidity is of the greatest importance and we are therefore very happy that the ESG-X range on Eurex is being extended with a future on the STOXX USA 500 ESG-X Index.”
“ESG derivatives have a huge potential for the mainstreaming of sustainable investing as they give our clients the ability to hedge and take positions while using fully compliant sustainable trading instruments,” added Paul Vivier, senior trader at BNP Paribas. “We fully support the launch of this new future as liquidity will drive ESG derivatives growth.”
Most recently, STOXX and Eurex partnered in the launch of ESG options contracts.