Singapore Exchange Introduces ESG Derivatives

The exchange partnered with FTSE Russell to accelerate its SGX FIRST sustainability agenda.

Singapore Exchange (SGX) has announced that it has launched ESG derivatives today in an effort to promote the integration of factors like Environment, Social, and Governance (ESG) into institutional investment portfolios through an efficient infrastructure.

According to the official press release, SGX collaborated with FTSE Russell to develop the new contracts. The recent launch is an extension of SGX FIRST (Future in Reshaping Sustainability Together), an initiative to expand its sustainability capabilities through the introduction of ESG-related investment products.

The exchange has launched a total of four contracts, including 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. Also, the exchange received certification of the contracts by the Commodity Futures Trading Commission (CFTC).

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Commenting on the recent launch, Michael Syn, Head of Equities at SGX, said: “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. Together with FTSE Russell’s strengths in investable multi-asset products and ESG, our offering of sustainable risk-management solutions in Asia, is unrivaled.”

Product Expansion

SGX reported strong financial results for H1 of FY21. The exchange reported growth in revenue and net income. SGX is planning to expand its product offering with the recent launch of ESG derivatives. Finance Magnates earlier reported about the listing of onshore bonds of China Development bank on the Singapore Exchange. SGX recently partnered with a state-owned investment firm, Temasek Holdings for a joint venture to launch a digital asset business with a focus on capital markets.

“The early success in our digital bond issuance platform has paved the way for SGX to make a larger move into digital assets, and we are very excited to take our digital asset business to the next level in partnership with Temasek,” Lee Beng Hong, Senior Managing Director, Head of fixed income, currencies and commodities (FICC) at SGX mentioned.

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