Launch of “Trading for Trees” Incentive Program Backed by New Green Bond Trading Functionality
MarketAxess Holdings Inc., the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, announced the launch of a “Trading for Trees” incentive program and the rollout of new capabilities designed to streamline clients’ trading and sustainable investing in Green Bonds.
The Green Bond initiatives follow a 108% year-over-year increase in global Green Bond trading activity on MarketAxess to over $19 billion in 2019. This growth is amid record Green Bond issuance and continued focus on sustainable investing in bonds deemed consistent with applicable Environmental, Social and Governance (ESG) guidelines. TRACE-reported trade volume in bonds financing environmentally friendly activities rose to over $57 billion in 2019, up from nearly $30 billion in 2018. With a 15% share of trading in these issues, MarketAxess ranks as the largest Green Bond marketplace in the US.
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“As one of the world’s largest electronic trading platforms with a global community of participants, we are ideally positioned to enhance our clients’ trading in this fast-growing Green Bond market,” said Chris Concannon, President and Chief Operating Officer at MarketAxess. “We recognize that our company can do even more to support environmentally responsible investing through the launch of our ‘Trading for Trees’ incentive program and new Green Bond trading functionality. These initiatives reflect the values and commitment of MarketAxess and its employees worldwide by combining support for our clients’ sustainable investment activities with direct action to benefit the environment.”
MarketAxess is partnering with the charitable organization One Tree Planted on its trading incentive program. Through the “Trading for Trees” program, 5 trees will be planted for every $1 million of Green Bond trading volume executed on the MarketAxess platform, further encouraging clients and dealers to enhance their ESG investment goals. Under the program, institutional investor and dealer clients will get credit for planting trees in the Amazon, Australia and other critical regions while fulfilling their ESG investment strategies. Based on global historical trading activity, MarketAxess expects the Trading for Trees program to plant over 100,000 trees in 2020. The program launched on January 1, 2020.
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To make it easier for clients to identify specific bond issues and access liquidity to meet their ESG strategies, MarketAxess has designed new Green Bond-related trading functionality:
- Flags to easily identify Green Bonds, issuers and dealers
- Watchlist functionality for a snapshot of Green Bond market activity
- Enriched “Like Bonds” tool to identify Green Bonds with similar characteristics as non-Green Bonds
- Enhanced Smart Dealer Select functionality to identify dealers that are providing liquidity in Green Bonds
Ashley Schulten, Head of Responsible Investing, Global Fixed Income at BlackRock said, “BlackRock has been a long-standing advocate for both enhancing efficiency in the fixed-income trading ecosystem and in the development of the Green Bond market. As an active Green Bond investor, ease in identifying securities and sourcing qualifying issues is helpful in managing our growing sustainability focused funds and adds further support to this nascent but growing asset class.”
“We expect this comprehensive market ecosystem with dealers, brokers, and market participants will create a deep and prevailing market,” said Russell Investments’ Global Head of Trading, Jason Lenzo. “As market participants and stewards of our environment, we also believe it’s critical to support such sustainability initiatives.”
Bonnie Wongtrakool, Global Head of ESG Investments and Portfolio Manager at Western Asset Management added, “As an active fixed-income manager, we value liquidity and transparency in pricing. We view the development of these functionalities as positive, as they will not only facilitate our portfolio management activities, but also support the ongoing growth in the sustainable bond market.”
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