Eurex expands sustainable investing derivatives with launch of ESG options

After introducing ESG futures in February, Eurex has said it will launch ESG options to support firms seeking sustainable investing capabilities.

Eurex Group has said it will launch the first exchange-traded environmental, social and governance (ESG)-based options, as it continues to build out its sustainable investing offering.

The derivatives exchange operator will introduce the new options based on the STOXX Europe 600 ESG-X Index as of 21 October, after launching ESG futures in February based on the STOXX benchmarks covering ESG exclusions, low carbon and climate impact.

Eurex added that its ESG futures have reached more than 362,000 contracts traded since launch, with 55% of flow coming from end clients and asset owners. The ESG-based derivatives aim to help market participants address the challenges and opportunities of sustainable investing.

“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,” Andrew Fischer, managing director at Goldman Sachs, commented. “We believe these options will offer market participants a good toolkit to manage their risk as the market grows in this area.”

Michael Peters, member of the Eurex executive board, added that options are the next logical step for Eurex to extend its sustainable investing derivatives products based on European benchmarks.

“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,” Peters said.

In April, Eurex launched its ESG futures in the US after receiving approval from the US Commodity Futures Trading Commission (CFTC), providing US market participants with access to ESG hedging instruments.