Carbon Credits

Investment exposure to global broad carbon cap-and-trade permits (carbon allowances) tracking liquid carbon credit futures contracts. Long-only exposure to carbon credits can help to reduce pollution and supports responsible investing in emission reductions.

Investment Strategy Objective

Pure-play directional long-only exposure to regulatory carbon allowances through regulatory carbon futures, broadly reflecting the most traded regulatory carbon worldwide. Investment theses:

  • Carbon allowances are consistent with incentives for emissions reduction and thereby provide instruments which reflect financial profits that can be generated by investing in emissions reduction
  • Carbon allowances reflect pricing of the emissions abatement curve in line with projected enforcement of emissions reduction, cost of abatement, productive of sustainable alternatives, and climate debt overhang and its related costs

Impact Objective

Climate change mitigation through economic incentives in emissions reduction

Allocation: passive
Strategy: pure-play
Asset class: derivative
Geography: global
Market capitalization: calculate
Median market cap per company: calculate (median over the past year)

Performance Metrics


The index covers the major European and North American cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), the Regional Greenhouse Gas Initiative (RGGI), and United Kingdom Allowances (UKA).

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