Using derivatives exposure to enhance ESG goals

Published on 7 December 2022

Investors must determine their policies and goals to effectively engage with environmental, social and governance (ESG) objectives, but they must also consider how to gain exposure to ESG instruments.

Direct investment via cash instruments is the most common route, but in order to optimise access to liquidity, pricing and risk management, firms can use derivatives to get exposure. Using cost-efficient and liquid futures to track a benchmarked sustainable index, reduces some of the illiquidity and expense associated with cash fixed income trading and investments.

Lee Bartholomew, head of fixed income & FX product research and development outlines the choices investors need to make, the access that Eurex’s own products provide, and the way for liquidity providers, investment managers and banks can get involved with Eurex’s ESG derivatives offering,