ESG derivatives as an effective tool for managing corporate sustainability strategy

Given the growing importance of environmental factors, social responsibility, and corporate governance, the paradigm of business strategies is increasingly focused not only on financial profits but also on the social and environmental impact of business. Master's thesis explores the potential of ESG derivatives as an effective tool for managing corporate sustainability strategies and an efficient way to achieve set ESG goals. The first chapter highlights the importance of incorporating ESG factors into a company's business strategy and discusses the potential of the derivatives market for achieving sustainable development. The second chapter focuses on the development of the derivatives market, classifies the different types of ESG derivatives, and examines the mechanisms of their functioning. The chapter also looks at key performance indicators for sustainability-linked derivatives. The third chapter presents practical applications of ESG derivatives in the sustainability strategies of selected companies, specifically Siemens Gamesa Renewable Energy, Nestlé Société Anonyme, and General Motors. This chapter examines the benefits of ESG derivatives and assesses their effectiveness as well as the prospects and risks of their future use.