Literature:

https://www.ecb.europa.eu/pub/economic-bulletin/focus/2022/html/ecb.ebbox202203_06~ca1e9ea13e.en.html

https://www.isda.org/a/soigE/Role-of-Derivatives-in-Carbon-Markets.pdf

Literature:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4412022

https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op281~05a7735b1c.en.pdf

https://www.ngfs.net/sites/default/files/ngfs_climate_scenario_technical_documentation_final.pdf

https://www.ngfs.net/sites/default/files/ngfs_climate_scenarios_technical_documentation__phase2_june2021.pdf

https://www.ngfs.net/sites/default/files/media/2021/08/27/ngfs_climate_scenarios_phase2_june2021.pdf

Carbon risk exposure gains in importance for long-term investors. Due to climate change or climate policies stranded assets might diminish the return of portfolios. Therefore, hedging possibilities need to be assessed.

See Andersson, M., Bolton, P., & Samama, F. (2016). Hedging climate risk. Financial Analysts Journal, 72(3), 13-32.