Goldman Sachs first to trade new CME ESG contract

Goldman Sachs has executed the first trade in the CME's E-mini S&P Europe 350 ESG index future product, the US exchange group has said.

The trade, with a notional value of €4 million (£3.4 million), met the requirement for block size of 50 lots, the Chicago-based exchange said in an emailed statement on Wednesday.

The product is designed to align with the updated standards set out in the EU sustainable finance disclosure regulation (SFDR). Article 8 funds must promote environmental or social goals and invest in companies with good governance.

“Goldman Sachs is pleased to have facilitated the first block trade in E-mini S&P Europe 350 ESG Futures,” Antony Harden, executive director at Goldman Sachs, said in the statement. “The development of liquid derivatives is crucial for market participants as they look to manage their ESG portfolios.”

The product is based on Standard and Poor’s’ detailed assessment methodology for ESG products and launched on May 24 this year.

“As demand for sustainable investments continues to grow globally, our goal is to grow the liquidity of these products and provide participants with a wider range of risk management tools which are crucial for the development of sustainable markets,” said Tim McCourt, global head of equity index and alternative products at CME Group.

The news comes as interest in ESG investing intensifies. This week, French asset management giant Amundi licensed the CAC40 ESG index from Euronext just four months after the European exchange group launched the list.