The collaboration will scale the development of high-integrity, nature-based carbon credits to meet growing demand
Aon plc and Revalue Nature Ltd., a next-generation developer of nature-based solutions, have announced they will work together to help accelerate the deployment of nature-based solutions and to reduce relevant risks associated with carbon offset transactions. This collaboration aims to encourage innovation in insurance for nature-based solutions and help deliver climate mitigation benefits, improve biodiversity and benefit local communities, in alignment with the Paris Agreement.
"The voluntary carbon market is rapidly expanding and represents a significant opportunity to drive environmental and social impacts on the climate transition through collaborative solutions – no one can transition alone," said Natalia Moudrak, climate resiliency leader for Aon's Public Sector Partnership.
Global voluntary carbon markets, where carbon credits that represent certified removals or reductions of greenhouse gases in the atmosphere are bought and sold, continue to grow, driven by public and private sector commitments to net zero goals. Voluntary market carbon credit sales totaled $2 billion in 2021 and are projected to reach $50 billion by 2030, according to the Institute of International Finance.
Revalue Nature designs and develops nature-based projects globally, protecting and regenerating forests, mangroves and other natural assets to produce future carbon credits and meet increasing demand. Aon is collaborating with Revalue Nature to help attract potential investors to these opportunities and to offer innovative insurance solutions to projects and their stakeholders to aid in de-risking these assets from damage and destruction due to natural perils and other pertinent risks. Through innovation in insurance, Aon aims to unlock greater access to capital for nature-based solutions, helping advance the integrity of voluntary carbon markets.
"The climate and nature crisis requires nature-based solutions to be developed at a level of integrity and at a scale well beyond what is being achieved today," said Stuart Rowland, founder and CEO of Revalue Nature. "Revalue is targeting that new level of scale and integrity by combining our platform, designed to streamline and scale project development, with a world-class carbon team. We see Aon as real innovators in the risk transfer solutions space, and this collaboration as a critical part of developing the next generation of nature-based projects."
Voluntary carbon markets are not presently regulated by governments and carbon project developers, communities, buyers, sellers, lenders, investors and various intermediaries can be exposed to a myriad of risks. The carbon credits from Revalue Nature will be generated through nature-based conservation and restoration projects spanning Africa, Latin America and Asia-Pacific. These projects are expected to be verified to meet and exceed the highest voluntary carbon standards. Layering insurance protection can work to help reduce investment risk and signal higher quality of projects.
"As the demand for high-quality carbon credits increases, there is an underserved market that requires both risk management and financing solutions," said Joe Monaghan, CEO for Aon's Public Sector Partnership. "Our market insights, analytics and risk transfer solutions, coupled with Revalue Nature's nature-based carbon projects and climate expertise, can help enable organizations to make better decisions as they work toward net-zero transition."
This collaboration is part of Aon's broader approach to delivering meaningful climate capabilities through innovation, analytics and matching capital to risk to help clients drive growth, accelerate their transition to net-zero goals, build physical resilience and navigate the risks and liabilities associated with economic and regulatory change. More information about Aon's approach to helping clients reduce risk in carbon offset transactions is available here.