Today, the European Capital Markets Institute (ECMI) of the Centre for European Policy Studies (CEPS) published a new paper on the role of derivatives in sustainable finance.

Over the past years, sustainability has risen in scope and importance on the agenda of policymakers. In Europe, this has been translated to the EU Sustainable Finance Action Plan. Derivatives markets can play a significant role in the context of the European Green Deal and the transition towards a low-carbon economy.

This report, which was published in cooperation with ISDA, highlights how derivatives markets can contribute by:

• Enabling the EU to raise and channel the necessary capital towards sustainable investments;
• Helping firms hedge risks related to environment, social and governance factors;
• Facilitating transparency, price discovery and market efficiency; and
• Contributing to long-termism.