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15 Jul 2024

Eurex

ESG Index Derivatives Development Update Q2/2024

The Eurex ESG Index Derivatives segment continued its strong development in Q2/2024, with a record high in June for the whole segment. 

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Development highlights Q2/2024

  • Traded volume of all ESG Index Derivatives products hit yet another record: June 2024 was the best month for the whole segment (Equity + Fixed Income) since its launch in February 2019, with 636,732 traded contracts and more than 19 billion EUR of capitalized volume.
  • The cumulated capitalized volume reached more than 42 billion EUR this year, leaving 2022 and 2023 behind by more than 8.5 billion EUR.
  • Capitalized Open Interest (OI) in all ESG Index products steadily increased, recording an all-time high of 6.8 billion EUR in May 2024.

Main facts & figures Q2/2024 – Equity and Fixed Income ESG Index Derivatives

  • Total traded volume: 845,060 contracts (+12.8% vs Q1/2024)
  • Total notional volume: 24.8 billion EUR (+41.7% vs Q1/2024)
  • Total notional Open Interest in June: 6.2 billion EUR (+22.3% vs June 2023)
  • Average Daily Volume (ADV): 12,653 contracts (+6.4% vs Q1/2024)

Derivatives on MSCI and SRI Indexes highlights

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Market consultation MSCI

Index providers explore the implications of ESMA’s new rules on the use of terms like “ESG” and “sustainable” in fund names due to the European Securities and Markets Authority (ESMA) tightening guidelines on fund names. Although these guidelines apply to funds, many of those funds track indices, which may consequently be impacted.
 
MSCI ESG Screened indices are already part of a recent MSCI consultation with a renaming proposal (started in April 2024, MSCI consultations under Consultation on proposal to rename three MSCI ESG Indexes).
 
For more background info on these developments, you can check some research papers on how these regulations interact with existing frameworks such as SFDR; and what this means for the future of sustainable investing in Europe (e.g., STOXX Whitepaper - What’s in a sustainability fund name? In Europe, increasing rigor (PERSPECTIVES REPORT JUNE 2024), or MSCI Research - Identity Check — ESMA’s New Name Guidelines for ESG and Sustainability-Related Funds).

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