SGX and FTSE Russell launch ESG index futures

New derivatives from SGX and FTSE aim to provide investors the opportunity to integrate ESG factors into investment portfolios.

Singapore Exchange (SGX) and FTSE Russell have partnered to launch a suite of environmental social and corporate governance (ESG) derivatives contracts. 

The launch is comprised of four new ESG index futures as part of SGX’s Future in Reshaping Sustainability Agenda (FIRST) sustainability agenda which it launched in December. 

The new derivatives include SGX FTSE emerging ESG index futures, SGX FTSE emerging Asia ESG index futures, SGX FTSE Asia ex Japan ESG index futures, and SGX FTSE Blossom Japan index futures.

“Our leadership in developing a pan-Asia shelf of benchmark equity derivatives has placed us in a distinct position to drive the change the world needs to see today,” said Michael Syn, head of equities at SGX. “Together with FTSE Russell’s strengths in investable multi-asset products and ESG, our offering of sustainable risk-management solutions in Asia is unrivalled.”

The launch follows a major partnership between SGX and FTSE Russell in August when the pair agreed to develop a multi-asset index derivatives offering focused on Asian and emerging markets, as well as ESG and listed real estate index derivatives.

ESG has been at the centre of several market initiatives by trading venues recently as the market looks to ways that it can adapt to more a sustainable equilibrium.

Cboe and LCH launched ESG index options in summer last year, followed by the European exchange Deutsche Börse which expanded its ESG data and analytics offering with the acquisition of Institutional Shareholder Services (ISS) in November.