Industry Updates

Euronext outlines ambition to become leading ESG index provider in Europe by 2024

The exchange plans to leverage ESG data partners

Theo Andrew

a sign on a building

Euronext has outlined ambitious plans to become the leading environmental, social and governance (ESG) index provider in Europe within the next three years.

Published in its strategic plan last week, Growth for Impact 2024, the pan-European exchange said it is looking to deepen its relationship with ETF issuers and asset owners through leveraging its “strong national brands, strong local presence and ecosystem of innovative ESG data providers”.

It added that it will scale up through leveraging its index franchise and new data sets from acquisitions including the recent €4.4bn acquisition of the Borsa Italiana from the London Stock Exchange in August.

The plans were outlined following the announcement that Fabrizio Testa, currently head of the Italian group’s bond platform MTS, would become CEO of the Borsa Italiana from next week, replacing Raffaele Jerusalmi who agreed to step down via mutual consent.

Outlining the new plans, the group said: “Euronext will take its data analytics offering to the next level by building on leading quant capabilities and most advanced data products tailored to end-user client segments.

“It will also monetise non-public proprietary data and extend its expertise to new datasets from recently integrated businesses, such as fixed income.”

The exchange has listed 460 ESG ETFs between 2018 and 2021 with combined assets under management of €146m, a 276% increase versus 2019.

Furthermore, 58 ESG indices were established, a 71% increase from 2019.

In October, Euronext launched an index tracking Italian blue-chip companies demonstrating good ESG practices in a bid to cater to the growing demand for sustainable investment tools.

It is Euronext’s second national ESG index following the launch of the CAC40 ESG index established in March.

The ambitious plans were announced alongside its Q3 results which saw revenue grow by 71.2% to €350.6m driven by strong trading and listing revenue.

Listing revenue grew by 42.1% from €35.8m over the same period last year to €50.8m in Q3 2021, with 97 new ETFs listing on the exchange, making it the leading exchange in Europe for ETF listings for the third quarter in a row.

Stéphane Boujnah, CEO of Euronext, said: “We confirmed again this quarter Euronext’s position as the leading listing venue in Europe, for equity, debt and ETFs. We welcomed 51 new equity listings, including 21 Tech companies IPOs, and 97 new ETFs.”

In 2019, Euronext slashed fees and introduced an issuer incentive scheme in a bid to lift ETF activity on the exchange.

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