Gallagher Specialty has introduced a new carbon insurance service designed to help clients manage the risks associated with their decarbonization initiatives. This move comes as companies increasingly seek to reduce their carbon footprints in response to growing regulatory and stakeholder pressure.
Recognizing the rising importance of carbon credits in these efforts, Gallagher Specialty noted that while purchasing carbon credits is currently voluntary, businesses are under escalating pressure to adopt strategies that minimize their environmental impact.
“It is anticipated that certain sectors will soon be required to reduce their environmental footprint through mandatory measures,” Gallagher Specialty stated.
The firm highlighted the significant growth potential of the voluntary carbon market, which was valued at $2 billion in 2022 and is projected to expand to $40 billion by 2030.
Gallagher Specialty’s new service aims to address the various risks associated with carbon projects. A team of climate risk professionals will provide clients with expert advice and develop customized insurance solutions tailored to their specific needs.
Leading this initiative is James Bosley, Head of Climate Strategy, Carbon Insurance & Parametric Solutions at Gallagher Specialty. Bosley emphasized the anticipated growth of the carbon market, driven by increasing corporate commitments to environmental responsibility and expanding reporting requirements.
“Since last year, UK financial and listed firms have been mandated to report their strategies for transitioning to net zero. Additionally, the EU’s Corporate Sustainability Reporting Directive will soon require companies to disclose their transition plans,” Bosley explained.
He added, “These regulations are just a few examples of the global trend towards greater transparency in climate strategies. For many businesses, purchasing carbon credits will be a key component of their plans to meet climate targets.”
Bosley further outlined the benefits of carbon insurance, which protects firms against risks such as non-delivery, damage to the underlying asset, reversal of carbon capture, or invalidation of credits. This insurance enables companies to invest confidently and meet their climate goals.
“Our team is equipped to advise clients on available insurance coverage, providing an additional layer of security in carbon credit transactions,” Bosley concluded. “By utilizing insurance, clients can proceed with greater assurance in their carbon reduction efforts.”
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