Geneva, Wednesday, 5th May 2021 – The United Nations Sustainable Stock Exchanges (SSE) initiative today launches a new guidance for derivatives exchanges prepared in collaboration with the World Federation of Exchanges (WFE), the global industry group for exchanges. The joint report provides guidance on "How Derivatives Exchanges can Promote Sustainable Development - An Action Menu".
The document was produced by an international Advisory Group made up of derivatives and stock exchange representatives and experts as well as experts from the wider ecosystem.
The 71 member-strong Group was chaired by CME’s Julie Winkler, Chief Commercial Officer and Owain Johnson, Managing Director and Global Head of Research and Product Development who said: “This report represents the first work by the SSE to extend beyond equity markets and stock exchanges into listed derivative markets, a welcome next step. It reviews the current approaches of derivatives exchanges in sustainability and suggests areas of further work and reflection. Without the risk management products and the forward price discovery that exchanges can bring, a transition to a more sustainable future will be more difficult, costly, and significantly less efficient. CME Group is proud to support this effort and honoured to have served as chair of the derivatives Advisory Group”
“The report is a timely undertaking and a sign of great collaboration within the industry. We are happy to respond to the demand from derivatives exchanges for more guidance on how they can better integrate sustainable development within their operations and are optimistic to see an enthusiastic uptake of the actions proposed.” said James Zhan, Chair of the SSE Governing Board and Director of Investment and Enterprise at UNCTAD.
Nandini Sukumar, Chief Executive Office, WFE said: The WFE has a long history of engaging with derivative exchanges and we are proud to publish today’s report and provide guidance and recommendations to our derivatives exchange members on what it means to be a sustainable derivatives exchange. We are looking forward to engaging on this topic further in the future and show that the industry is moving forwards to a sustainable future.
The project builds on initial work from the WFE on this topic and is a response to demand from a number of derivatives exchanges to the SSE to further expand this topic.
The resulting report fills an existing gap in the literature by identifying ways in which derivatives exchanges can play a role in supporting the sustainability transition.
In addition to exploring existing sustainability-related derivatives products and initiatives that exchanges offer, the report also provides an Action Menu that provides practical suggestions on how to make the derivatives ecosystem and derivatives exchanges’ operations more sustainable.
Some of these actions (e.g. product development) may happen in response to market signals and opportunities created by regulatory developments.
Others will depend on an exchange’s assessment of where it is able to have impact given its operating environment and level of support from participants in its ecosystem.
Ultimately there are opportunities for all exchange operators to ensure their markets are responding to the sustainability imperative.
About the WFE
The WFE is the global industry group for exchanges and clearing houses around the world, representing over 250 market infrastructures ranging from those that operate the largest financial centres to those that run frontier markets. Founded in 1961, the Federation was set up to contribute to the development, support and promotion of organised and regulated securities markets in order to meet the needs of the world’s capital markets in the best interests of their users.
