How CFC and Sylvera are partnering to reduce risk in the carbon markets, together

In today’s rapidly evolving sustainability landscape, businesses are increasingly drawn to carbon markets as a means of contributing to global climate goals. However, the volatility and complexity of these markets present significant challenges, particularly when it comes to managing risk. CFC, a leader in emerging risk insurance, recognized these challenges and sought to provide solutions that would not only safeguard investments but also enhance confidence in the carbon market. To achieve this, they partnered with Sylvera, leveraging their comprehensive carbon data tools to create insurance products that address these risks head-on.

Identifying and Addressing Carbon Market Risks

CFC’s journey into the carbon market began with a clear understanding of the risks involved. The carbon market, while essential for driving global sustainability efforts, is fraught with uncertainties, including the risk of non-delivery of carbon credits and the potential cancellation or reversal of issued credits due to regulatory changes. For investors, these risks can be a major deterrent.

To mitigate these risks, CFC developed two innovative insurance products: Delivery Risk Insurance and Carbon Cancellation Insurance. These products are designed to protect investors from the financial impacts of undelivered or cancelled carbon credits, ensuring that their investments remain secure despite the inherent volatility of the market. A third innovative product, Carbon Lending Insurance, lowers the risk for banks and lenders associated with providing debt financing to carbon-credit projects. It’s designed to help capital flow into the market.

“Investors need assurance that their contributions to the carbon market will yield tangible results. Our partnership with Sylvera allows us to provide that assurance by backing our insurance products with the most reliable data available.” – George Beattie, Head of Innovation, CFC

Leveraging Sylvera’s Data for Enhanced Underwriting

Central to the success of CFC’s insurance products is their ability to accurately assess and manage the risks associated with carbon credits. This is where Sylvera’s end-to-end carbon data platform comes into play. By integrating Sylvera’s comprehensive carbon project data and ratings into their underwriting models, CFC can confidently evaluate the risk profiles of different carbon projects.

Sylvera’s Ratings App, which provides detailed insights into the quality and performance of carbon projects, has become an essential tool for CFC. The app allows CFC to screen and shortlist the most reliable projects for their clients, ensuring that their insurance products are backed by data that reflects real-world outcomes and market conditions.

“Sylvera’s technology gives us the transparency and accountability we need to offer robust insurance solutions in the carbon market. Their data is integral to our ability to underwrite these new products with confidence.” - George Beattie, Head of Innovation, CFC

 ‍Ensuring Quality and Credibility in the Carbon Market

 For CFC, ensuring the quality and credibility of the carbon projects they support is paramount. This commitment to quality is reflected in their rigorous due diligence process, which now incorporates Sylvera’s ratings and data insights. By using Sylvera’s platform, CFC can ensure that the carbon credits they insure are not only high-quality but also contribute meaningfully to global climate goals.

 Trust being a core value for CFC, and the crucial role it plays in the carbon markets, where investors need to know that their investments are making a real impact, Sylvera’s data-driven approach allows CFC to provide assurance, reinforcing their reputation as a trusted partner in the carbon market. 

Staying on the forefront 

 As the carbon market continues to grow, CFC is committed to staying at the forefront of innovation in risk management. Their partnership with Sylvera is a key component of this strategy, enabling them to offer insurance products that not only mitigate risk but also drive greater participation in the market. Looking ahead, CFC plans to expand their offerings, continuing to use Sylvera’s insights to refine and enhance their products.

“The future of the carbon market depends on trust and transparency. By working with Sylvera, we’re not just mitigating risk – we’re helping to build a market that investors can be confident in.” - George Beattie, Head of Innovation, CFC

About CFC

CFC is a leading insurance provider specializing in emerging risks at the intersection of technology and business. With over 20 years of experience, CFC has pioneered innovative solutions in cyber insurance, digital healthcare, fintech, and now the carbon market. Their commitment to providing cutting-edge insurance products is matched by their dedication to sustainability, as they work to reduce risk and build confidence in the markets that are essential for a sustainable future.