Euronext Introduces The CAC 40 ESG Index Futures Contract
Euronext has announced the launch of the CAC 40 ESG index futures contract. The contract, which is based on the ESG version of the French national benchmark index, gives institutional investors additional solutions to help accelerate the growth of sustainable investment.
The contract, which is backed by market makers BNP Paribas and Société Générale, both of which are strongly committed to the transition to sustainable finance, will allow market participants to manage and hedge ESG portfolios efficiently and under ESG principles, as well as lower trading costs by using a futures contract.
The new contract will make it easier to reallocate assets from the CAC 40 index to its ESG equivalent in the future. The CAC 40 ESG index, which was launched in March 2021, quickly gained traction as a highly liquid alternative for asset owners searching for cost-effective solutions to integrate sustainability considerations into the heart of their investments.
A year later, a fourth of the CAC 40 index's assets under management had been transferred to the CAC 40 ESG index.
The CAC 40 ESG index methodology, which is based on Moody's ESG Solutions data, combines Environmental, Social, and Governance concerns with the French SRI label and UN Global Compact principles while excluding companies engaged in coal, controversial weapons, and tobacco activities.
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Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext, said:
“After the strong success of the ESG version of the CAC 40 index, we are proud to provide investors today 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."
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."
Source: Mondo Visione
Read more on the differences between SRI, ESG, and Impact Investing here.