The exposure of corporate bonds to climate risks is subject to significant un- certainty. This uncertainty, referred to as climate beta uncertainty, is both economically and statistically significant in pricing the cross-section of bond returns. Understanding this uncertainty is crucial, as it influences risk pre- mia and the effectiveness of bonds as hedging instruments against climate risks. Climate exposures exhibit distinct patterns based on duration-based return decompositions, affecting their impact on bond valuations. For total returns, bonds exposed to specific climate indices appear to offer potential hedges against future climate outcomes, but they provide lower returns. For duration-adjusted returns, a higher climate beta is associated with higher future bond returns, indicating that greater exposure to climate risks com- mands a return premium once interest rate effects are controlled for. The results suggest that the hedging capacity of corporate bonds primarily stems from their linkage to duration-matched long-term government bonds, while credit returns—albeit small—compensate investors for bearing climate risk exposure.