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Sustainable markets to price climate risk. Where there is risk, there is opportunity. Climate risk mitigation is influencing the energy landscape and requires a price signal for the conservation and cultivation of nature. The energy transition is a long-term phenomenon, underpinned by a market-based economy that can deliver cost-effective, scalable solutions. Creating an asset class to properly value natural capital will also be key for a sustainable future.
Corporates subject to carbon cap and trade programs and renewable fuel standards use our markets to meet obligations and manage their risk in a cost-effective way. Market participants can deliver carbon allowances, carbon credits and renewable energy certificates into a range of registries in Europe and North America.
A growing number of corporates are signing up for voluntary commitments around the world. This means increasingly diverse stakeholders can use ICE’s markets to offset their carbon liability, invest in green attributes or benchmark their internal cost of carbon. Policy makers rely on price signals from environmental markets to gauge the effectiveness of their programs and ensure desired outcomes — such as driving investment in renewables and the use of less-carbon-intensive fuels. Investors can use the price signals from ICE markets and indices to help assess climate transition risk in their portfolios, and then access liquidity pools for managing risk and allocating capital to benefit from energy transition opportunities.
The ICE Carbon Futures Index Family is made up of pricing of the four most actively traded carbon markets in the world: the European Union Emissions Trading Scheme (EU ETS), the Western Climate Initiative (California Cap and Trade Program), the Regional Greenhouse Gas Initiative (RGGI), and the UK Emissions Trading Scheme (UK ETS).
Based on the ICE Global Carbon Index, the futures contract provides exposure to the four largest cap and trade markets in the world in one financially settled instrument. This product offers access to the price of the negative externality of pollution allowing a wide group of stakeholders to manage the price risk associated with their net zero commitments and corresponding carbon liabilities.
The Fit for 55 package is a set of proposals to revise EU legislation to help cut net greenhouse gas emissions by 62% by 2030. For many companies, the proposals mean that they will have more carbon tonnes at risk - incentivizing them to seek abatement options that support a path to net zero emissions.
Assess sustainability risks and opportunities with data from the leading provider of environmental markets with access to global & voluntary carbon data, ICE’s sustainable finance data & indices, global renewables and fuels data, and more.