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Research from insurance company Chaucer shows increase in companies planting trees in support of net zero targets
Fifty-one per cent of FTSE 100 companies are now actively investing in tree planting initiatives as part of their environmental, social, and governance (ESG) programmes, according to new research by global insurance group Chaucer.
A report released earlier this week revealed these leading corporates has collectively planted more than 350 million trees to date, and had publish commitments to plant a further 300 million trees.
Chaucer said 24 per cent of FTSE 100 companies are now investing in tree planting programmes with the specific objective of offsetting their carbon emissions, while 27 per cent are backing projects to sequester carbon or increase biodiversity more generally as part of their ESG strategy.
The company said the rapid expansion of corporate tree-planting programmes was also fuelling demand for new speciality insurance cover for these projects, given the way natural disasters, disease, and pests can potentially cause "huge damage" to a company's offset investments.
For example, a number of recent forest fires have created substantial losses across the carbon offset sector. A fire in 2022 in Aragon, Spain, destroyed 14,000 hectares of trees planted to store carbon, while in the summer of 2021 more than 60,000 hectares of 'offset forests' burned down in California, with a further 40,000 hectares destroyed by a fire in Oregon.
"Businesses are now investing considerable amounts in tree-planting projects, offsetting their carbon emissions in an attempt to tackle climate change," said Hayley Maynard, head of innovation, Chaucer. "These initiatives can cost millions to set up and maintain, take a long time to become established and represent significant investments of both time and money. Appropriate insurance coverage can safeguard both."
Maynard said Chaucer has teamed up with carbon insurance specialist Kita to insure the delivery risk of carbon capture projects for its clients, hailing the partnership as "a milestone in environmental insurance".
"If we want more businesses to invest in tree-planting and carbon-capture projects, we must help them make the investment without fearing risks beyond their control," she said.
"These critical tree planting projects are at risk from natural and human interference. Those investing in large-scale initiatives should ensure that their projects are sufficiently insured to protect both their investments and the environment."
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