Череп А.В., Каткова Н.В.
2020 Economics and Management  
The article discusses hedging tools and insurance of environmental risks used in international practice. It was noted that so-called environmental derivatives are used as financial instruments for hedging environmental risks. Environmental derivatives are financial instruments that can be used by organizations or individuals to reduce the risk of adverse and unforeseen weather conditions or environmental catastrophes (in particular, weather derivatives, carbon credits and greenhouse gases
more » ... ons quotas, as well as futures and options for them, exchange trade funds based on ESG indicators, including environmental, social and management strategies). The main types of weather and carbon derivatives, as well as ways to trade them are considered. Thus, weather derivatives are usually based on an index that measures a certain weather aspect: cooling degree days, heating degree days, snowfall, snow depth, wind speed or chill level. Weather options and futures for trading (call) and put (put) are traded on exchanges, and on the over-thecounter markets (OTC) weather derivatives take various forms - from swaps to forward contracts. Carbon financial instruments include such as tradable pollution permits and credits, green trade, carbon derivatives, natural securities, carbon investment funds. The following carbon assets are traded on the EU spot carbon market: EU quotas, EU aviation quotas, certified emission reductionunits, emission reduction units. There are primary and secondary markets for carbon assets, as well as a market for derivatives — futures and options for quotas. Index exchange traded funds (ETFs), which are formed on the basis of ESG indicators (environmental, social and management strategies), are also considered as a tool for hedging environmental risks. Environmental, social and management strategies are increasingly popular in the indexing and ETF industries as investors seek to apply social values to investment portfolios.
doi:10.36919/2312-7812.2.2020.30 fatcat:wyswgsww5baqlcnybj3gp642au