CFC, the specialist insurance provider, pioneer in emerging risk and market leader in cyber, is pleased to announce a groundbreaking collaboration with BACX and Lockton Argentina, Lockton London. This strategic partnership marks the launch of the first-ever exchange-traded, insured carbon credit transaction in Latin America, setting a new benchmark for the region's carbon markets.
Innovative collaboration for a sustainable future
The cooperation between CFC, BACX and Lockton aims to provide comprehensive insurance solutions that mitigate financial and management risks associated with voluntary carbon credits. This partnership ensures that all registry verified transactions conducted through BACX can be insured against Ex Ante Non Delivery and / or Ex Post Cancellation, offering unprecedented security and confidence to market participants.
Key highlights of the partnership
Comprehensive coverage
The insurance policies cover carbon credits against risks such as invalidation, cancellation, political fraud, mismanagement and registry demise. This includes a blanket coverage for a named set of carbon registries, addressing perils such as fraud, mismanagement, political risk, registry demise and adverse media risk.
Enhanced credibility
By offering fully insured transactions, BACX enhances its credibility and market stability, attracting more businesses to the platform and fostering growth in the carbon trading market.
Streamlined processes
Lockton will facilitate the insurance procurement process, ensuring compliance with local regulations and providing ongoing support and communication between BACX and CFC Insurance.
Innovative insurance solutions
CFC will underwrite the carbon credits based on stringent quality standards, offering financial protection and crisis management support in case of adverse events.
George Beattie, Head of Innovation at CFC, commented: "We are excited to partner with BACX and the teams at Lockton to bring this innovative insurance solution to the Latin American market. Our goal is to provide robust financial protection for carbon credit transactions, thereby supporting the growth and integrity of the carbon markets."
Alejandro Guerrero, President of BACX, added: "This partnership marks a significant milestone for BACX and the Latin American carbon market. By ensuring that all our registry verified transactions are insured, we are not only protecting our clients but also reinforcing our commitment to sustainability and market transparency."
David Briscoe, Head of Digital Integration & Special Projects at Lockton London, commented:
“ This partnership is a significant leap forward in bridging corporate capital with carbon markets in the most efficient way possible. By aligning robust insurance solutions with VCR transactions, we enable businesses to confidently invest in sustainability initiatives, knowing that their financial and reputational risks are well-managed. Lockton is proud to be at the forefront of this transformative movement.
Driving market confidence and growth
The launch of the first-ever exchange-traded, insured carbon credit transaction in Latin America signifies a major advancement in the region's carbon markets. The comprehensive insurance coverage provided through this partnership will drive market confidence, encourage participation, and support the broader adoption of carbon trading as a vital tool for combating climate change.
Learn all about carbon insurance here.
