Ethical derivatives strive to win over sceptics

New Isda standards are latest move to overcome client “hesitancy” to use contracts linked to ESG targets

Green choices

Corporate clients are shying away from sustainability-linked derivatives over concerns that the performance targets embedded in the contracts are inconsistent and hard to verify. An influential industry body released standards for these derivatives earlier this month in a bid to assuage client fears, but some say the standards don’t go far enough.

Derivatives linked to environmental, social or governance (ESG) metrics are bespoke contracts between counterparties, and can vary widely deal-by

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