The facility ‘will not only help de-risk investments from a financial and reputational perspective, but also support the integrity and expansion of the wider carbon credit ecosystem’, says UK digital asset leader
Broker Marsh and We2sure – a carbon credit certificate insurance and risk management firm – have teamed up to launch a new insurance facility to help UK organisations manage rising carbon credit certificate fraud.
Carbon credit certificates, also known as carbon allowances, are permits that enable companies to emit a certain amount of carbon dioxide or other greenhouse gases (GHGs) across their operations. The goal of carbon credits is to reduce the amount of GHGs emitted into the atmosphere.
However, Marsh reported that the driver behind its new facility is the fact that the burgeoning carbon credit industry is being increasingly targeted by fraudsters that are selling counterfeit carbon credit certificates, or certificates for projects which do not exist.
The broker’s facility – which is backed by insurers Sompo, Brit and Talbot – aims to insure businesses against the risk of purchasing counterfeit certificates, the sale of certificates for non-existent projects and theft.
The facility also provides access to We2sure’s technology, called Carbon Actuator, which assesses the validity of certificates prior to purchase.
De-risking a newer marketplace
Rupert Poland, UK digital asset leader at Marsh, said: “Businesses are increasingly using carbon credits as a core element of their strategy to meet net zero targets and this leaves them exposed to fraudsters seeking to take advantage of this growing market.
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“The lack of standardisation and transparency in the market makes it difficult for businesses to assess the legitimacy of the carbon credits they are buying.
“This new facility will not only help de-risk investments for businesses from a financial and reputational perspective, but also support the integrity and expansion of the wider carbon credit ecosystem.”
Simon Wigzell, head of business development at We2sure, added: “Our data-backed verification process addresses the critical issue of authenticity in carbon credit certificates, substantially reducing reputational risks for buyers.
“This transformative solution establishes a robust integrity standard, effectively converting intangible carbon credits into tangible assets, thereby enabling corporations to invest with greater confidence.”
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