Kita And ICR Partner For Innovative Buffer Risk Management

Innovative Buffer Risk Management Partnership With Kita And ICR - Carbon Herald
Image: Kita

In an innovative buffer risk management partnership, Kita and the International Carbon Registry (ICR) have come together to ensure the independent risk management of the buffer of the ICR.

Kita’s ‘Buffer as a Service’ will enhance ICR’s dedication to quality assurance, process efficiency, and transparent results. This collaboration will provide technical oversight and risk evaluation in accordance with financial industry standards.

The ICR is a platform that provides a way for climate projects to register online and receive carbon credits if they meet the criteria set by the ICR and adhere to ISO 14064-2 standards. The initiative provides high-integrity carbon credits from projects around the world that adhere to globally recognized standards and universally accepted carbon guidelines.

Relevant: Unified Carbon Standard Coalition Announced At COP28

Kita, on the other hand, offers a range of carbon insurance products that provide assurance and protection against losses. Maintaining a buffer is a crucial way for carbon standards, like the ICR, to prove and uphold their credibility in today’s voluntary carbon market. 

The buffer approach involves a central pool of carbon credits, with each project developer required to make their own contribution. Buffers are essential for ensuring the reliability of the carbon scheme in terms of permanence and performance. 

However, the level of risk varies for each carbon project, which can make it challenging to determine the necessary contribution from each developer.

Read more: New TransparenC Platform To Rebuild Trust In Carbon Credits

The collaboration between the two companies will employ the ‘Buffer as a Service’ product created by Kita to minimize risk for the ICR by implementing proactive management strategies for their buffer and utilizing project-specific risk assessments based on insurance-related technical underwriting standards.

The two companies will collaborate to improve buffer quality assurance and minimize conflicts of interest through third-party administration by a regulated entity. 

This partnership between Kita and ICR will also support collaborative solutions and more efficient contributions to buffers for top-notch project developers, enhance confidence in buffers through frequent scenario analyses to identify and manage risks, and promote clear adherence to developing standards within the VCM and other regulatory bodies.

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