The Singapore Exchange (SGX) Group announced, on Oct 27, that it has partnered with MSCI to licence the newly-launched MSCI Climate Action Indexes for listed futures contracts.
The indexes, which include companies taking concrete steps to reduce their emission reduction targets, were launched on Oct 25. The companies in the indexes were evaluated based on a range of climate indicators that assess their current carbon intensity and potential to lead in the climate transition, relative to their peers.
According to SGX, the exchange recognises the importance of strengthening the ecosystem with relevant solutions to support climate transition.
The group adds that it will be working with market participants to develop a range of climate-related products including futures contracts to help investors reduce their portfolio carbon footprints in a bid to strengthen its current suite of climate products.
“As a leading international exchange in Asia, we have a unique responsibility to lead the market in managing climate risks. We need to quicken the pace of transition and our work with MSCI seeks to address the pressing need for more targeted solutions in the market,” says Loh Boon Chye, CEO of SGX.
“Given the growing influence of investors over companies, these indexes coupled with related products in the pipeline will facilitate climate engagement and accelerate the flow of funds to directly support companies in their transition efforts. We will continue to work with all our partners to identify and develop suitable climate-related solutions to meet investor needs,” Loh adds.
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“Through this agreement, SGX Group and MSCI will help the finance and investment industry accelerate progress toward net-zero carbon emissions and a more sustainable future. This industry has a key role to play in reaching net zero, and MSCI is proud to do our part in making innovative climate tools more widely available,” says Henry Fernandez, chairman and CEO of MSCI.
To Gillian Tan, assistant managing director (development and international) and chief sustainability officer at The Monetary Authority of Singapore (MAS), the move to combat climate change requires a “coordinated global response”.
“SGX Group and MSCI are key players in the global financial ecosystem and this collaboration will harness private capital to drive change. MAS welcomes the listing of MSCI Climate Action products on SGX to provide a transparent offering for investors seeking to decarbonise their equity portfolios,” Tan adds.
