What is Price Hedging? Sustainability Simplified Glossary

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Price hedging in environmental commodities refers to the practice of using financial instruments or strategies to manage or reduce the risk associated with price fluctuations in markets for environmental commodities, such as carbon credits, Renewable Energy Certificates (RECs), or other emissions trading instruments. 

Environmental commodities, like carbon credits or RECs, often have variable prices that can fluctuate due to changes in market demand, regulatory shifts, technological advancements, or alterations in environmental policies. 

Price hedging strategies in these markets involve various approaches to mitigate the potential financial risks associated with these fluctuations. STRIVE by STX has created three HedgeZero strategies to optimize procurement: 

These comprehensive solutions safeguard our clients’ financial interests against price risk, market volatility, and the limited liquidity of environmental commodity markets. Clients are empowered to shape a hedging strategy that resonates with their prerequisites while ensuring a simplified procurement process. This approach addresses commercial needs while fulfilling companies’ environmental sustainability goals. 

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