ICE Reports Record Activity Across Its Environmental Complex as Participants Price Climate Risk
Intercontinental Exchange (NYSE: ICE) reported record open interest in its environmental complex, reaching 2.65 million contracts on November 12, 2020. This growth, driven by a 40% increase in participants since 2017, highlights the vital role of market-based mechanisms in pricing climate risk. Companies use ICE's markets for compliance with carbon cap and trade programs, while investors leverage price signals for risk assessment. ICE remains a leader in environmental markets and offers various sustainability indices to manage ESG-related risks.
- Record open interest in environmental complex at 2.65 million contracts.
- 40% increase in trading participants since 2017, enhancing market liquidity.
- Strong growth of North American participants, up over 70% since 2017.
- ICE's markets serve as critical tools for companies managing carbon obligations.
- None.
LONDON & NEW YORK--(BUSINESS WIRE)--Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today reported record open interest across its environmental complex as participants price climate risk.
The environmental complex - which includes futures and options connected to ICE’s European (EUA) and California Carbon allowances (CCA), Regional Greenhouse Gas Initiative (RGGI) and renewable energy credits (RECs) - hit record open interest of approximately 2.65 million contracts on November 12, 2020.
Alongside this record growth in liquidity, the number of participants trading ICE’s carbon markets has grown by more than
“Liberalized markets are critical to the energy transition as they enable competition between energy sources and in doing so help change behavior by attributing a cost to pollution,” said Gordon Bennett, Managing Director of Utility Markets at ICE. “This record activity, coupled with the growth in the number of participants trading these markets, reflects the fundamental role market-based mechanisms like carbon cap and trade schemes play in pricing climate risk.”
Companies subject to carbon cap and trade programs and renewable standards use ICE’s markets to meet obligations and manage their risk in the most cost-effective way and policy makers rely on price signals from environmental markets, such as those traded on ICE, to gauge the effectiveness of their programs and ensure desired outcomes.
As a growing number of companies sign up for voluntary commitments around the world, increasingly diverse stakeholders are turning to ICE’s markets to offset their carbon footprint, invest in green attributes or benchmark their internal cost of carbon. Investors use the price signals from ICE’s markets and indices to help assess climate transition risk in their portfolios, and access liquidity pools for managing risk and allocating capital to benefit from energy transition opportunities.
ICE has been a leader in environmental markets for nearly two decades. ICE has a range of additional solutions including Sustainability Indices that serve as fixed income sustainable benchmarks that account for Environmental, Social and Governance (ESG) factors. These include the ICE Global Carbon Futures Index, which is part of the ICE Carbon Index Family, and measures the performance of a long-only basket of ICE EUA futures contracts, ICE California Carbon Allowance futures contracts, and ICE Regional Greenhouse Gas Initiative futures contracts. Alongside this, the MSCI ESG Index Futures listed on ICE Futures US offer customers a variety of ESG-related futures for benchmarking and managing risk.
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company and provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. We operate regulated marketplaces, including the New York Stock Exchange, for the listing, trading and clearing of a broad array of derivatives contracts and financial securities across major asset classes. Our comprehensive data services offering supports the trading, investment, risk management and connectivity needs of customers around the world and across asset classes. As a leading technology provider for the U.S. residential mortgage industry, ICE Mortgage Technology provides the technology and infrastructure to transform and digitize U.S. residential mortgages, from application and loan origination through to final settlement.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 6, 2020.
Source: Intercontinental Exchange
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