Assessing the Clean Energy Economy Through a Risk Management and Innovation Lens
2/2025, Originally published on UNC | Institute for the Environment
Reimagining Risk in the Clean Energy Economy
When I think of risk, I’m compelled to either eliminate it, prepare for it, or endure its consequences. The clean energy economy emerged from the need to mitigate the risks of escalating natural disasters and steer the world toward a more sustainable future. Yet, like many global industries, it faces new and evolving challenges – technological limitations, cybersecurity threats, inconsistent public and private support, and geopolitical tensions over the availability and ownership of critical minerals essential to the energy transition.
Throughout my academic career, these risks have often seemed insurmountable. However, Rose Hall, CEO and Founder of RH Business Ventures, LLC (RHBV), challenges this conventional mindset. She urges us to see risk not as an obstacle, but as a catalyst for innovation and sustainable development. As she aptly states, “Everything we are doing with climate and sustainability has never been done before; at the same time, we are facing risks we’ve never encountered.” The path forward is uncertain, yet this uncertainty is where the greatest opportunities lie.
Like risk, the clean energy economy is in constant evolution. Companies and stakeholders are regularly developing new technologies, adopting advanced data modeling techniques, integrating diverse talent, and reshaping business strategies. While some perceive this rapid change as risky, embracing risk is fundamental to innovation and progress. However, as Ms. Hall emphasizes, no entity can bear this burden alone. Insurers, in particular, play a crucial role as partners and enablers, helping companies navigate risk while expanding the realm of what is possible. Ms. Hall will be exploring these ideas in more detail at the upcoming 2025 Cleantech Summit on March 24-25, 2025.
Expertise in Risk Management & Innovation
Ms. Hall’s career exemplifies the dedication, ambition, and resilience required to embrace new opportunities and drive meaningful change. With a Bachelor of Science in Civil Engineering from Rutgers, a Master of Science in Civil Engineering and Construction Engineering from Stanford University, and over 25 years of industry experience, her journey reflects a commitment to continuous learning and the application of knowledge to emerging challenges.
She launched her career at Turner Construction Company, where her natural leadership skills and ability to liaise between insurers, brokers, contractors, and builders set her apart in an industry defined by inherent risk. Expanding her expertise through expert witness work and leadership roles at WCD Group, LLC (now part of Gallagher Bassett Technical Services), she eventually joined AXA XL, a leading global property and casualty (P&C) insurance carrier. Here, she played a pivotal role in bridging a critical gap by helping clients assess and mitigate risk while enabling underwriters to develop more innovative policy offerings.
Yet, simply acting as a liaison was not enough. Recognizing the potential to transform the firm’s business model, she co-founded “The AXA XL Ecosystem,” an award-winning initiative designed to help clients mitigate risk and streamline decision-making through cutting-edge technology. She continued to refine and expand the model, exploring new ways to enhance AXA XL’s overall business strategy.
The Role of Insurers in a Low-Carbon Future
Ms. Hall approaches clean energy from a unique perspective – one grounded in risk management. Her insights into how insurers can drive innovation by helping mitigate risk in the sector are particularly compelling.
From pre-construction Environmental Impact Statements to long-term operations, maintenance, and supply chain risks, every stage of a clean energy project carries risk, much of which is ultimately transferred to insurers. Recognizing this, insurers globally, particularly in Europe, are taking an active role in facilitating the clean energy transition. They do so by reducing capital constraints, leveraging advanced data analytics to assess and manage risk, investing surplus capital (“float”) into clean energy initiatives, and developing innovative insurance models, such as parametric insurance, to enhance weather resilience and financial stability. Yet, despite these efforts, major global insurers still hold nearly half a trillion dollars in fossil fuel investments as of 2023.
My first instinct is to advocate for divestment. Stranded assets pose a significant liability for insurers, while continued fossil fuel combustion increases the risk of catastrophic events, driving a surge in billion-dollar loss events over the past decade. However, in my conversation with Ms. Hall, she offered a perspective that reshaped my thinking:
Insurers are not just financial entities – they are business partners with a moral responsibility to uphold economic stability. Rather than withdrawing support entirely, they have a unique opportunity to guide fossil fuel companies through the energy transition.
This reminded me of Ørsted, a global renewable energy powerhouse that initially operated as an oil and gas company. By the early 2000s, Ørsted successfully transitioned to renewable energy without fundamentally altering its business model. Insurers have the leverage, financial influence, and intellectual capital to encourage similar transformations across the industry.
However, as Ms. Hall points out, fossil fuel companies remain highly profitable, making them resistant to change or resorting to “greenwashing” to appear environmentally responsible. Thus, ensuring a timely and sustainable transition will require innovative insurance strategies and stronger corporate accountability.
Innovating Beyond Risk: Insurers as Drivers of Clean Energy Advancement
One example Ms. Hall highlights from her time at AXA XL, where the company provided an innovative technological solution to reduce risks and costs for clients, is their partnership with a solution called Laiier, a fluid-sensing, IoT (internet of things) tape. This technology can be applied to surfaces such as windows or, as she discussed, wind turbines to detect and mitigate oil leaks. Although seemingly minor, this innovation allows for early detection of potential mechanical failures, enhances worker safety by minimizing the need for technicians to scale turbines for inspections, and improves operational efficiency, ultimately lowering costs for operators.
This is just one example of how insurers can drive technological advancements in the clean energy sector, making it a more attractive business than fossil fuels. By integrating risk-reducing innovations into their products, insurers can go beyond offering premium discounts and actively shape industry advancements while reducing financial barriers for renewable energy projects.
Yet, Ms. Hall emphasizes that innovation extends beyond technology. A common misconception in the insurance industry is the conflation of innovation with technological development. In reality, new business models can be just as transformative. For example, parametric weather insurance like Parameter Climate, can offer financial protection to intermittent energy suppliers, such as solar farms, by covering losses from unfavorable weather conditions. By mitigating financial risks, this solution enhances the competitiveness of clean energy providers and accelerates the adoption of renewables.
Looking Ahead: Engaging with Risk to Drive Innovation
As Ms. Hall embarks on her new venture, RHBV, she is eager to help startups, insurers, brokers, and enterprise clients unlock the potential of risk as a driver of success. With a visionary approach to risk management, she sees immense possibilities in the industries and people she will engage with. Under her leadership, RHBV will be an invaluable asset for companies looking to transform their risk into opportunities – and I see tremendous potential for clean energy companies to collaborate with her in the future.
Like Ms. Hall’s career, the clean energy economy is continuously evolving. The question is no longer whether risk exists – but rather how we choose to engage with it to propel innovation and accelerate the transition to a sustainable future.
This article was written by Victoria Farella, an IE Cleantech Corner intern.
