
ESG-linked hedges raise interest – and questions
Carrot-and-stick trades pay off if green targets are hit, but setting and monitoring those goals is tricky

A growing number of corporate treasurers are hoping their foreign exchange hedges will also help make them cleaner and greener – by giving them a better rate if they hit environmental targets and whacking them with a penalty if they don’t.
In the last seven months, wind-turbine company Siemens Gamesa has executed its first FX trade linked to environmental, social and governance (ESG) factors, as has Italian energy giant Enel. A third large corporate in the energy sector tells FX Markets it is
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