CME Group said Monday it would launch an emissions offset futures contract sourced from agriculture, forestry and other land use projects in an ongoing effort aimed at helping the market better manage climate risk as the energy transition accelerates.

CME said the Nature-Based Global Emissions Offset (N-GEO) contract would launch August 1, pending regulatory review. It was developed jointly with Xpansiv, an exchange for environmental, social and governance (eSG) commodities. Xpansiv launched an N-GEO spot contract earlier this year. 

“More companies are relying on nature-based offsets as part of their overall climate strategies as the move to net-zero emissions continues to accelerate,” said CME’s Peter Keavey, global head of energy. “By offering a standardized mechanism for managing the price risk associated with those initiatives, our new N-GEO futures will provide the marketplace with an important tool to help navigate the ongoing energy transition.”

As net-zero emissions targets have expanded across the global economy a wide variety of solutions have emerged to help companies pursue ESG initiatives, including “nature-based” projects that restore ecosystems and help remove greenhouse gases from the atmosphere. 

CME said the N-GEO futures contract would allow for delivery of eligible voluntary offset credits and would be listed by the New York Mercantile Exchange.