Banks explore ESG-linked deal contingents

Trend for tying derivatives to ethical criteria could soon extend to deal contingent hedges

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Users of deal contingent hedges may soon be able to link the derivatives to ethical targets, as banks consider launching trades with an environmental, social and governance (ESG) component.

“We should be doing them,” says Christopher Wall, global head of foreign exchange structuring at Deutsche Bank. “We will do them. When there’s client demand for a solution then banks will step up to the plate, so I’m already firing emails about it.”

ESG-linked derivatives already exist in various forms. In

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