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SGX expands sustainability initiatives with new ESG derivatives

Felicia Tan
Felicia Tan1/25/2021 3:58 PM GMT+08  • 1 min read
SGX expands sustainability initiatives with new ESG derivatives
Investors can trade these derivatives directly from the US.
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Singapore Exchange (SGX) has, on Jan 25, launched its environmental, social and governance (ESG) derivatives under the SGX FIRST (Future in Reshaping Sustainability Together) initiative.

SGX FIRST, which is Asia’s only multi-partner, multi-asset exchange-led sustainability platform, was first launched on Dec 15, 2020.

The four new ESG derivatives, which are developed by SGX in partnership with FTSE Russell, are 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.

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These were designed to enable the seamless adoption of ESG factors into investment portfolios, which allows investors more choices in promoting ESG integration into institutional investment portfolios.

The indices are backed by major global pension funds and are drawn from leading international standards. Together, they provide a combination of improved ESG profile while maintaining risk and return characteristics that are similar to benchmark equity indices.

All four derivatives have been backed by the Commodity Futures Trading Commission (CFTC), which means investors can trade them directly from the US.

As at 3.57pm, shares in SGX are trading 6 cents lower or 0.6% down at $10.03.

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