The corporate social responsibility is a process driven by globalization, deregulation and privatization. Proponents of corporate social responsibility are keen to demonstrate that the businesses have responsibilities beyond the production of goods, services and profit making, and that socially responsible businesses can help solve important social and environmental problems. Hence, businesses perform best when they play a strong role in the communities in which they operate. Awareness of financial implications by climate change is growing among participants in the financial sector, especially after the ratification of the Kyoto protocol. The majority of regulations constrain emissions of greenhouse gases (GHG), and on the other hand they enable a purchase of the so-called emission credits within and out of the regulated area. All this led to the growth of market called “carbon market”, Carbon transactions are the contracts between two parties, where one party purchases a certain quantity og “emission” credits that it can further use as a buyer, from the other party. Emission credits are traded on the climate exchanges. Participants on the carbon market are various, such as corporations, individuals, and institutional investors. Carbon credits represent significant potential for investments, and investors can also diversify their portfolio with it, because this asset class shows low correlation with other asset classes. Potential benefits and risks associated with this asset class are yet to be researched.

Milica Latinović