Euronext has launched a futures contract on the CAC 40 ESG index to provide institutional investors with an additional tool to contribute to the accelerating development of sustainable investment.
The new contract is based on the ESG version of the French national benchmark index and is supported by BNP Paribas and Société Générale as market makers.
It will enable market participants to manage and hedge ESG portfolios efficiently and in compliance with ESG principles, as well as lower the cost of trading through the use of a futures contract.
It will also facilitate the ongoing reallocation of assets from the CAC 40 index to its ESG version.
Launched in March 2021, Euronext said the CAC 40 ESG index has gained traction, because it represents a highly liquid solution for asset owners looking for cost-effective ways to integrate sustainable factors at the core of their investments.
To date, a quarter of the assets under management of the CAC 40 index have been transferred to the CAC 40 ESG index.
The CAC 40 ESG index methodology is powered by Moody’s ESG Solutions data, and combines environmental, social and governance considerations with the French SRI label and the UN Global Compact principles.
It also excludes companies involved in coal, controversial weapons and tobacco activities.
Stéphane Boujnah, CEO and chairman of the managing board of Euronext, said that the aim is to provide investors with a powerful tool to reallocate their investment flows towards sustainable finance, since they play a key role in making this transition of flows a reality.
“As the CAC 40 index future is the most traded index future on Euronext, we are opening a new avenue in the development of responsible finance by launching the ESG version of this blue-chip index futures contract, he added.
Alexandre Benech, global head of flow trading at BNP Paribas Global Markets. said, “BNP Paribas supports the growth of ESG benchmarks as an important driver to increased transparency in this market, and as such will be a liquidity provider on the new CAC 40 ESG index future. BNP Paribas also provides liquidity on existing CAC ESG ETFs onto exchanges and for our clients”.
Euronext ESG indices comprise over 80% of all its benchmarks. The new product joins its stable of other ESG versions of national benchmark indices including the MIB ESG index in Milan, the OBX ESG index in Oslo and the AEX ESG index in Amsterdam.
©Markets Media Europe 2022
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