UN member States agreed 17 SDGs to be accomplished by 2030. The specific SDGs that an exchange is able to impact will depend on the nature of the products that it trades and its broader operating environment. For commodity derivatives exchanges, the following goal and targets are particularly relevant:
Derivatives exchanges are an important part of the overall solution, whether as providers of relevant products and services, contributors to greater data availability and transparency or as conveners of the market to address barriers to change.
Commodity derivatives markets, for example, provide a direct link to the underlying market and therefore present a unique opportunity for supporting sustainable development. The products that are traded in these markets are both exposed to sustainability risks (such as climate change and biodiversity loss/destruction of ecosystem services) and contributors to such risks. The production of these commodities can be both a source of economic development as well as having negative environmental and social impacts. Operators of commodity derivatives markets therefore have a specific opportunity to support a shift to more sustainable production and consumption patterns. Derivatives exchanges could also list products that support action on climate change and mitigation of the impacts of climate change (SDG 13) or that enhance access to reliable, affordable, sustainable and modern energy for all (SDG 7).
Derivatives exchanges partner with the UN on sustainability
The SSE derivatives network launches with 12 founding members from across the world, namely:
◼ Australian Securities Exchange (ASX) (Australia)
◼ Borsa Istanbul (Turkey)
◼ Bursa Malaysia (Malaysia)
◼ Cboe Global Markets (United States)
◼ CME Group (United States)
◼ Deutsche Börse AG / Eurex (Germany)
◼ MexDer (BMV Group) (Mexico)
◼ NZX Limited (New Zealand)
◼ Singapore Exchange (Singapore)
◼ The Intercontinental Exchange (ICE) (United States)
◼ TMX Group /Montreal Exchange (Canada)
The group has recently added two new members, Mongolian Agricultural Commodity Exchange (MCE) and Nairobi Securities Exchange (NSE).
An action menu for derivative exchanges to promote sustainable development
SSE and WFE Guidance Document
How derivative exchanges can promote sustainable development
In this new joint report, SSE initiative and WFE provide an overview of the role of derivatives markets generally, present some of the things derivatives exchanges are already doing in relation to sustainability, and highlight ways in which these exchanges can support the transition to more sustainable development pathways.
This report can be found on the SSE’s publications page here.