ICE looks to clean up its act with the launch of new fixed income ESG indices

Darren Sinden

CTBC Investments will launch investable tracking products, such as ETFs to reflect the performance of the ESG indices.

MetaTrader 5 advances its hedging functionality

ESG, a three letter acronym for Environmental Social and Governance, has been the buzzword-du-jour for financial markets throughout 2020 and seem likely to remain so into 2021 and beyond.

Asset managers have been busy launching new funds and repurposing old vehicles to meet the demand from investors for more ethically surefooted products, whilst rating agencies are actively promoting their own scoring and ranking systems for ESG and sustainability criteria.

The exchanges don’t want to be left out and they see opportunities in creating indices and other products designed to track the performance of ESG investments and assets.

IntercontinentalExchange (ICE) which operates futures exchanges and clearing houses around the world today announced a partnership aimed at doing just that, in cooperation with CTBC Investments, a Taiwanese investment manager that is part of CTBC Financial Holdings which employs 27,000 people worldwide.

The new venture will seek to create a series of ESG indices and ETFs and ICE has launched two new bond indices to set the ball rolling. The first is a 15 year-plus large-cap carbon reduction index and the second a 15 year plus ultra large-cap US corporate ESG index.

The new indices will join the exchanges existing stable of 5000 global fixed income, equity, commodity and currency indices.

For its part, CTBC Investments will launch investable tracking products, such as ETFs to reflect the performance of the ESG indices. Both the indices and proposed ETFs having been recognised by the Taiwanese TAIPEX exchange as being viable benchmarks.

CTBC is Taiwan’s third-largest asset manager and has an established track record in ETF investing and it has become a significant player in the local ETF markets.

ICE, which was founded in 2000, is itself is a fortune 500 company which owns the NYSE, the former IPE and LIFFE exchanges and has operations in Singapore and Abu Dhabi.

Its consolidated Q3 2020 net income was US$390 million, so the new venture is unlikely to make a dramatic difference to the group earnings. However, it does open up a new geography for ICE as well as a new range of products.

The roots of the ICE exchange are to be found in the energy markets which of course are not ESG friendly, however, it is rather telling that just under half of ICE’s Q3 2020 revenues of $1.40 billion was drawn from data and listings services, rather than trading and clearing revenues.

If we are to continue to move towards an ESG focused, low carbon future then ICE will need to leverage the data and listings side of its business further as fossil fuels are eventually phased out,

though no doubt it will also look to introduce ESG and clean energy futures contracts as well.

Read this next

blockdag

BlockDAG’s $28.5M Presale Ignites Investor Frenzy! Dashboard Upgrade Unveils Top Rankings, Overshadowing Retik Finance Listings!

Learn how BlockDAG’s updated dashboard, featuring detailed community rankings, is diverting investor interest from Retik Finance’s anticipated market entries.

Digital Assets

Gala Games reportedly hacked for $200 million, token nosedives

The native token of crypto gaming project Gala Games (GALA) dropped sharply amid rumors of a massive transfer worth over $200 million that traders suspected might be a hack.

Digital Assets

Ether skyrockets amid rumors of spot ETF approval

The chances of the U.S. government approving spot Ether ETFs have increased, according to top Bloomberg ETF analysts. Initially viewed as unlikely, analysts James Seyffart and Eric Balchunas now see a 75% chance of approval, up from 25%, following recent developments.

Digital Assets

New York judge approves $2 billion settlement with Genesis

A New York bankruptcy judge has approved a $2 billion settlement between the New York State Attorney General’s office and crypto lender Genesis, marking the largest settlement against a crypto firm in the state’s history.

Fundamental Analysis, Market News, Tech and Fundamental

Global FX Market Summary: Federal Reserve Policy, ECB, Geopolitical Tensions, May 20 ,2024

Fed holding rates to fight inflation, ECB likely cuts June rates, geopolitical tensions favor safe-haven USD

Digital Assets

Grayscale CEO steps down, replaced by Goldman Sachs veteran

Grayscale CEO Michael Sonnenshein after 10 years with the digital asset investment firm, the company said on Monday.

blockdag

Influencers Fuel BlockDAG’s $28.4M Presale Amid Solana Price Surge & Kaspa Bull Run

Dive into BlockDAG’s presale success, boosted by influencer endorsements. Explore the Solana price surge and Kaspa’s bullish sentiments.

Market News, Tech and Fundamental, Technical Analysis

EURGBP Technical Analysis Report 20 May, 2024

EURGBP currency pair can be expected to fall further toward the next support level 0.8525, which is the low of the previous corrective wave ii.

Digital Assets

Pump.fun exec arrested for $1.9 million exploit, claims bail in UK

Jarett Dunn, a former employee of the memecoin creator and trading platform pump.fun, claims he was arrested and subsequently released on bail in the United Kingdom following a $1.9 million exploit on the platform.

<