Eurex Clearing will introduce an ESG clearing solution designed to offer greater transparency to clearing members and end users regarding the sustainability credentials of their cleared portfolios and their counterparties.
The new service, named ESG Clearing Compass, will go live from 3 April 2023 and will support two components, the ESG Portfolio Assessment and the ESG Visibility Hub.
ESG Portfolio Assessment will provide screening of securities collateral provided as margin or through default fund contributions against climate metrics.
The climate data will be sourced from ISS ESG, the sustainable investment division of Institutional Shareholder Services. Deutsche Börse Group, Eurex Clearing’s parent company, finalised the purchase of an 81 per cent stake in ISS in February 2021.
The ESG Visibility Hub provides an additional set of tools through which users can publicise their sustainability profile and initiatives on the Eurex Clearing web portal.
This additional information will also enable users to evaluate the sustainability profiles and ESG strategies of their trading counterparties.
ABN AMRO Clearing and Societe Generale have been working with Eurex Clearing in developing this service as early partners.
Deutsche Börse’s chief sustainability officer for trading and clearing Christina Sell, says: "Many market participants still struggle with incomplete, inconsistent or insufficient data regarding their exposure to climate-related physical and transition risks.
“As a financial infrastructure service provider, we consider it our responsibility to contribute to transparency. With our innovative offering, our members can efficiently receive high-quality ESG data via established channels.”
Pauline Engelberts, global chief operations and chief sustainability officer at ABN AMRO Clearing, says: “The clearing industry is at an early stage of the transformation journey. We appreciate the efforts of Eurex Clearing to enable its clients to have more data transparency and awareness of their ESG profile and strategy. This will pave the way for better climate metrics. We are happy to support this initiative.”
