With sustainability high on the global agenda, businesses are setting their sights on carbon neutrality. Demand for carbon credits has surged in recent years.
Carbon credits are an effective way of offsetting emissions, but they are not without risk. Projects can sometimes underperform. Regulations can change. A whole range of unforeseen events can arise, creating uncertainty for those investing in carbon credits. That’s where carbon credit insurance comes in.
How carbon credit insurance protects you
Carbon credit insurance mitigates the risks that come with investing in carbon credits. Here’s an overview of how our carbon credit insurance makes your investment more secure:
1.
Non-Delivery Cover
If a project fails to deliver the promised credits, this cover compensates you for any shortfall, protecting your investment from financial loss.
2.
Credit Cancellation Insurance
This cover protects you against the risk of credits being cancelled or invalidated due to factors such as compliance failures, verification errors or misleading claims.
3.
Force Majeure Protection
Offering peace of mind in the face of unforeseen events, this covers losses arising from natural disasters and other uncontrollable circumstances that can impact a project’s ability to generate credits.
4.
Political Risk Insurance
Political instability can sometimes affect the validity or delivery of credits. This cover offers valuable protection for international investments, particularly in regions with heightened political risk.
5.
Corresponding Adjustment Protection
Insurance for voluntary carbon credits sold with Article 6 authorization.
6.
Buffer Depletion Protection Cover
A creditworthy protective wrap against depletion of the buffer pool which acts as a backstop against unexpected loss and security to counterparties
7.
Carbon Lender Non-Payment Insurance
Protect loans to carbon project developers against non-repayment due to project performance failure for any reason.
How you benefit from carbon credit insurance
Our carbon credit insurance addresses all these risks and more
Why Lockton?
We tailor our solutions to the unique circumstances of your business. The underwriting focus is on project quality, using a careful and rigorous selection criteria.
We can offer multi-year solutions to align with your goals and timelines - and cover limits to protect substantial investments in carbon-related businesses.
By inspiring confidence among buyers, investors and lenders alike, our specialist insurance solutions help make investing in carbon credits a more reliable and appealing way to support a more sustainable future.
Contact
For further information, please contact us.
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Lockton Companies LLP. Authorised and regulated by the Financial Conduct Authority. A Lloyd’s broker. Registered in England & Wales at The St Botolph Building, 138 Houndsditch, London, EC3A 7AG. Company No. OC353198