LONDON (Reuters) – From Thursday, Marsh customers in the United States will be able to pay their fees in the form of voluntary carbon credits or renewable energy certificates, the insurance broker said, as part of a campaign to help customers achieve zero-zero climate goals.
While most corporate buyers of carbon credits will use them to offset their emissions and then “retire” the credit, many companies looking to ensure they have enough may find they have too many after accounting for their emissions, Marsh said.
If so, customers can now pay for insurance brokerage or risk advisory services by transferring credits and RECs to Bank of America (NYSE:), which will pay the proceeds to Marsh, the broker said in a statement. She believes the arrangement is a first in the financial services industry.
“The insurance industry has a very central role in climate and sustainability issues,” Jack Flug, managing director at Marsh, told Reuters. He added that paying the fees with carbon credits “highlights and provides some incentive for companies to continue on this path of sustainability and try to do better.”
The credit market is likely to grow strongly in the US after the recent passage of the Inflation Reduction Act that offers tax breaks to US companies that use renewable energy.
Going forward, Flug said, Marsh hopes to expand the option for customers to settle fees using credits to other markets globally.
Voluntary carbon offset credits are records of investments organizations make in environmental and infrastructure projects that either remove carbon dioxide or avoid carbon dioxide emissions.
RECs are records of renewable electricity generation issued to organizations that generate energy from a renewable energy source.