From: Captive Insurance Times

Frances Jones explores how the functions of a captive can be used as tools for a company’s transition to net-zero

The transition to cleaner energy, or net-zero, is high on the agenda of the boards of most companies around the world.

Now, more than ever, they need to respond to market and environmental pressures to meet ESG commitments. This follows the World Meteorological Organisation’s confirmation that July 2023 was the hottest month ever recorded globally.

Against this backdrop of urgency, this writer asks what functions a captive has that can aid its parent company’s transition to net-zero.

John Yaple, senior vice president of captives at Hub International, says: “The captive can aid the parent in a number of ways, particularly by a formal financing mechanism for exposures that may not be easily transferable to the commercial market. Without sufficient loss and underwriting data it is unlikely the commercial market will be able to address the challenges of a net-zero energy transition.”