Leading derivatives marketplace CME Group announced the launch of a “Sustainable Clearing” service, the first-ever for the derivatives industry, enabling market participants to track and report on how their hedging activities utilizing sustainable derivatives for products such as carbon offsets, battery metals, and bioenergy, as well as interest rate and foreign exchange futures for sustainable businesses, are advancing their sustainability targets.  

Sunil Cutinho, President at CME Clearing, said:

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“This innovative clearing offering makes it simple for firms to track their sustainable derivatives positions by seamlessly integrating reporting into their existing workflows. Our solution ensures that all sustainable trades continue to benefit from our established risk management approach, including full margin offsets where applicable, which creates efficiencies for clients and end users.”

CME Group stated that participating futures commission merchants will be provided with Sustainable Clearing eligibility criteria, aligned to external standards such as the International Capital Markets Association (ICMA) Social & Green Bond Principles to identify and tag their sustainable trades. CME Group stated that it will be ‘criteria neutral’ to ensure only independent third-party standards are applied.

 Julie Winkler, Chief Commercial Officer, CME Group, said:

“Sustainability continues to be an increasing priority for our global clients as they significantly expand both the risk management that they provide to green businesses and environmental projects. This new framework for clearing sustainable derivatives will make it easier for our clients to measure the impact of their support for sustainable activities and can be part of the solution to encourage further growth in this key sector as the economy transitions to net-zero emissions.”