Leading New York-based insurance broker Marsh and risk management specialist We2Sure announced a product to protect businesses from carbon credit fraud on Wednesday.

According to a statement, the new insurance facility will help organizations in the UK, EU, and US manage the rapidly rising risks associated with carbon credit certificate fraud.

While businesses use carbon credits to offset their greenhouse gas emissions, the industry is increasingly targeted by fraudsters, who sell counterfeit certificates or approvals for projects that do not exist.

The statement added that Marsh’s new facility will enable businesses to insure against the risk of purchasing counterfeit certificates, the sale of certificates for non-existent projects and theft.

Backed by insurers Sompo, Brit and Talbot, the facility also enables businesses to access We2Sure’s technology to assess certificates’ validity before purchasing them.

AI at core

We2Sure’s CarbonActuator can identify duplicate and counterfeit certificates. At the same time, its satellite and artificial intelligence monitor projects in real-time and identify ones that do not meet a pre-determined standard and do not reflect the certificates issued.

“The lack of standardization and transparency in the market makes it difficult for businesses to assess the legitimacy of the carbon credits they are buying,” said Rupert Poland, UK Digital Asset Leader, Marsh in the statement.

Poland added that this new facility will help de-risk business investments from a financial and reputational perspective and support the integrity and expansion of the broader carbon credit ecosystem.

“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, enabling corporations to invest more confidently,” said Simon Wigzell, head of business development and Underwriting at We2Sure.

As the demand for carbon credits continues to grow in response to climate change initiatives, introducing this insurance product marks a significant step towards enhancing trust and accountability within the market.

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