As part of our respective responses to the UK’s recent consultation (‘Voluntary carbon and nature markets: Raising integrity’), Oka, BeZero, and Howden co-signed an open letter urging the Government to integrate robust risk management and tangible market incentives into its carbon market framework. As representatives of firms specialising in carbon-market risk, ratings, insurance, and advisory services, we view these two levers as integral for achieving not just market integrity but also market scale.

We welcome the Government’s commitment to establishing a world-leading framework for carbon and nature markets. Beyond advancing national climate objectives, the consultation represents an exceptional opportunity to attract international investment, stimulate job creation, and reinforce the UK’s position as a global hub for green finance. Speaking as representatives from a vibrant ecosystem of firms specialising in risk, insurance, and consulting services for carbon markets, we are testament to the sector’s capacity for financial innovation and economic growth. 

To fully realise the opportunity ahead, we advocate an ambitious approach that builds on existing proposals. The ICVCM’s CCP framework is a minimum threshold for quality. The Government should explicitly incorporate risk-management tools — such as independent ratings and insurance protections — to safeguard both investor confidence and environmental outcomes. Proactive risk management, underpinned by rigorous reporting standards and regulatory oversight and enforcement, is a hallmark of every established market and a prerequisite for integrity. Transparent communication and effective mitigation of credit risk, combined with clear accountability, remediation, and compensation frameworks when failure inevitably does occur, will enable the UK carbon market to scale to its full economic potential. 

Integrity alone, however, will not create a thriving market. Many companies remain hesitant to engage with carbon markets, perceiving risks as outweighing potential benefits. To accelerate industry growth — and realise associated gains, from enhanced energy security to substantial green job creation — we urge the Government to introduce tangible incentives for organisations using high-quality carbon credits to manage residual emissions. The Government already has effective levers at its disposal, such as targeted tax benefits or preferential public procurement. Moreover, London’s internationally renowned financial services sector is uniquely positioned to support the development and implementation of a world-class market framework. Pairing integrity with incentives will overcome market inertia, drive private-sector participation, and cement the UK’s global leadership in carbon and nature markets.