Sustainable derivatives include products such as carbon offsets, battery metals, bioenergy and S&P ESG 500 futures, as well as other hedging activity that supports sustainable businesses. Sustainable clearing allows firms to credibly measure risk management activities that are used to finance ESG initiatives.
Transparent reporting
Measure and report on cleared derivative positions that support sustainable businesses to benefit from greater clarity around progress towards ESG advancement.
Independent oversight instills credibility
CME Group Benchmark Administration oversight helps avoid conflicts of interest and data greenwashing, while aligning to accepted ESG standards.
No additional impact
There are no additional fees or margins to use this service, nor any impact to risk offsets already in place.
Easy to implement
Requires a tagging of trades in existing accounts to integrate seamlessly into existing operational workflows.
All participants will be provided with Sustainable Clearing eligibility criteria to identify and tag a sustainable trade. The eligibility criteria will be aligned to external standards already published, such as ICMA's Social & Green Bond Principles. CME Group will be criteria neutral to ensure only independent third-party standards are applied.
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The criteria and governance of Sustainable Clearing will be administered by CME Benchmark Administration Limited, an independent legal entity within CME Group, that manages and operates the company’s benchmarks and indices. A robust governance framework and an inclusive criteria committee based on ICMA principles will ensure that Sustainable Clearing operates with integrity and transparency, staying close to relevant standards in the industry as they evolve and mature.
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CME Group Launches First-Ever Sustainable Derivatives Clearing ServiceConsider the following examples of derivatives trades used to support sustainability that now can be measured:
A Spanish solar power firm buys polysilicon from China in USD and sells electricity in EUR; the firm uses FX derivatives to hedge its exposure.
A US wind power developer approaches a US bank to hedge its interest rate exposure as it takes out loans to fund further development.
A French developer plans to build social housing and wants to manage the risk of an interest rate move using interest rate derivatives.
An oil company plans to acquire an electric charging company but wants to lock in the repayment rate on its floating borrowings, using interest rate derivatives.
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