By Dieter Holger
Deutsche Boerse AG (DB1.XE) said Monday that investors can now trade futures contracts on the Eurex exchange based on an environmental, social and governance market index investing in U.S. companies.
The German stock-market company said the Eurex STOXX USA 500 ESG-X Futures contract screens out thermal-coal mining, coal-fired power plants, controversial weapons, tobacco and businesses in violation of the United Nations Global Compact.
There are some 462 components in the benchmark, including tech titans such as Microsoft, Apple, Amazon, Facebook, Intel and Google parent Alphabet, alongside financiers such as Visa Inc. (V), JPMorgan Chase & and Mastercard.
Oil-and-gas companies Exxon Mobil, Chevron and ConocoPhillips are also present.
ESG futures on Eurex have traded for one year as the exchange's parent company, Deutsche Boerse, continues to expand its derivative offerings for ESG investors.
In December, trades of STOXX Europe 600 ESG-X Index futures hit record highs since its February 2019 launch, with more than 183,000 contracts exchanging hands in that month at a value of 5.7 billion euros ($6.24 billion), STOXX Ltd. said. More than half of the flows into ESG derivatives have come from asset owners such as pension funds.
Expanding ESG futures into the U.S. equity market was "the next logical step" and more regions and markets will follow in early March, said Michael Peters, deputy chief executive of Eurex.
"We want to offer our clients the greatest possible flexibility in ESG investments," he said.
Write to Dieter Holger at email@example.com; @dieterholger