PHOTO
Dubai: With the UAE hosting the pivotal COP28, the intersection of climate policy and market strategy is more prominent than ever. Discerning traders are positioning themselves to take advantage of specialized financial products that are both climate-forward and financially astute, including the Green Index, the ESG Index, the EV Index, and the EUA Futures CFDs.
These advanced trading instruments and sustainable indices hold a strategic importance in the context of COP28's environmental mandates, as investors apply non-financial factors as part of their analysis process to identify material risks and growth opportunities, according to the CFA Institute.
“ESG assets are anticipated to surpass $53 trillion by the year 2025 on a global scale, which constitutes over one-third of the projected total assets under management, amounting to $140.5 trillion”, says Ritu Singh, Regional Director of StoneX Group Inc., adding: “This significant growth is driven by a confluence of factors, including the impact of the pandemic and the sustainable recovery initiatives in the United States, European Union, and China.”
On a regional level, the UAE and GCC markets stand at the forefront of promoting environmental, social, and governance (ESG) practices. In fact, a recent publication by PwC states that “the UAE has been making significant strides towards sustainability and ESG integration, setting a new standard for the entire region”.
In this context, investors have been increasingly interested in the Green Index and the ESG Index, which they can trade while gaining exposure to ESG companies in an index, by purchasing an index mutual fund or exchange-traded fund (ETF) that seeks to replicate the performance of that index.
From one hand, the ESG Index provides a comprehensive framework for evaluating and identifying companies based on the sustainability of their business practices. It serves as a critical benchmark that integrates a company's environmental impact, social responsibility, and governance standards into its valuation. With COP28 setting new sustainability standards, the ESG Index may serve as a leading indicator for companies likely to outperform in a regulatory environment increasingly favoring sustainable practices.
On the other hand, the Green Index tracks about 30 securities issued for green, social, or sustainable purposes. It offers a sophisticated approach for traders looking to diversify their portfolio with sustainability in mind. It’s a composite of carefully vetted equities, focusing on companies with a significant footprint in green technology and sustainable practices. With COP28 emphasizing sustainable growth, the Green Index is poised to reflect the expected regulatory boosts and technological advancements, thereby offering traders a dynamic tool for environmentally aligned investment.
EUA Futures CFDs have also gained visibility, representing a direct line to the pulse of the carbon market, with EUAs depicting the emission allowances in metric ton of carbon dioxide or an equivalent greenhouse gas by each EU member state. These indices allow traders to speculate on the price of carbon credits, with a keen understanding of the EU's cap-and-trade system.
In a nutshell, such financial instruments provide sophisticated avenues for aligning trading strategies with the COP28 climate agenda. For traders in the UAE and globally, these tools represent a pathway to potential profitability in a world increasingly driven by green initiatives, and they can be accessed through trusted trading partners like FOREX.com which has an office in Dubai. Owned by StoneX Group, FOREX.com offers a wide range of investment opportunities and tools, including ESG indices and thematic investments, empowering investors to potentially make more informed decisions that align with their ESG values.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries.
FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.
GAIN Global Markets Inc. is part of the GAIN Capital Holdings, Inc. group of companies, which has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. All are separate but affiliated subsidiaries of StoneX Group Inc.
About StoneX Group Inc.
StoneX Group Inc., through its subsidiaries, operates a global financial services network that connects companies, organizations, traders and investors to the global market ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services, high touch service and deep expertise. The company strives to be the one trusted partner to its clients, providing its network, product and services to allow them to pursue trading opportunities, manage their market risks, make investments and improve their business performance. A Fortune 100 company with a nearly 100-year track record, StoneX Group Inc. serves more than 50,000 commercial, institutional and payments clients, and more than 370,000 retail accounts, from nearly 80 offices across six continents.
Further information on the Company is available at www.stonex.com.
About Forex.com
FOREX.com is part of StoneX Group Inc. (NASDAQ: SNEX), a publicly traded company that meets the highest standards of corporate governance, financial reporting and disclosure. FOREX.com gives its clients access to more than 5,500 tradable markets and is one of the global market leaders in leveraged trading.www.forex.com