Delyth Hughes

The role of sustainability-linked derivatives in meeting global ESG goals

This article explores the role of ESG derivatives transactions in enabling companies, financial institutions and governments to meet their ambitious sustainability targets with a particular focus on bespoke, innovative sustainability-linked hedging solutions. This article highlights different ways in which sustainability-linked derivatives transactions can be, and have been, structured. In addition, this article explores the challenges currently faced by parties entering into such transactions stemming largely from a lack of regulation, resulting in limited transparency, standardisation and reporting.