KF Spotlight : Sustainable Finance & Futures Market



Executive Summary

As the costs and challenges of climate change continue to mount, so too has the need to mobilize capital to drive climate innovation. The financial services sector is an essential partner in meeting this need, by providing funding and managing the risks associated with sustainable investments, including project risk and interest rate and currency risks.

ESG adoption is on the rise, fueled by client demand and a desire to make an impact. As ESG momentum continues to gain steam, investors are refining and evolving their strategies. This can be seen in the implementation arena, where investors are moving away from basic screening methods towards more targeted and sophisticated strategies, Meanwhile, ESG integration remains the top implementation strategy showing how investors are taking a holistic approach as they look to comprehensively embed ESG into the investment process.

Customers are searching for climate mitigation strategies and new ESG-related products, whether for investment or financing purposes. To avoid greenwashing and ensure a high level of trust and expected outcomes, the financial service industry constantly develops globally consistent ESG standards, best practices and taxonomies to ensure investment products are consistent and verifiably accurate in terms of delivering sustainable and socially responsible outcomes. Derivatives markets plays a big role in facilitating the transition to a sustainable economy where the enable more capital to be channeled towards sustainable investments, help market participants hedge risk related to ESG factors, facilitate transparency, price discovery and market efficiency.

This report has been exclusively created by Kenanga Futures’ Business Development & Strategy team.

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