Kita – the world’s first insurer of carbon credits, announced a new innovative approach ensuring reliability and confidence in carbon credit purchases. The company announced on October 12th that its clients who purchase the flagship insurance product of Kita, the Carbon Purchase Protection Cover, will now be able to receive their insurance claims in replacement carbon credits.
Kita’s product the Carbon Purchase Protection Cover insures forward purchased carbon credits against delivery risk. If clients have bought carbon credits from tree-planting projects for example that have burnt down, or the projects have failed to deliver the promised emissions savings, customers will now be able to receive their insurance compensation in either cash payments or replacement carbon credits. That will guarantee the customers will always receive the credits they initially bought.
“At the heart of our sustainability strategy is our commitment to being a force for good. Our ability to pay valid claims via carbon credits is a key step to ensure clients are able to meet their global net-zero and wider sustainability ambitions,” said Dr. Hayley Mayard, Head of Innovation, Chaucer.
Kita will be working closely with Chaucer – a leading specialty (re) insurance group working with brokers, coverholders and clients to protect and support business activities around the world. The goal of the collaboration is to review and assess claims and offer replacement carbon credit payments.
Kita has also secured Letters of Intent from Everland, Pachama, Vertree and Respira to be the suppliers of the replacement carbon credits in the event of a claim. The companies are the founding members of the so-called dedicated Carbon Supplier Pool that will be providing the credits.
“Kita’s mission is to drive more financing to scale high-integrity carbon projects, and we believe insurance is a key enabler to do this. We are proud to be leading the field when it comes to paying claims in carbon, and look forward to working with, and expanding, our Carbon Supplier Pool as we move forward,” commented Natalia Dorfman, CEO and co-founder of Kita.
Kita’s move is a response to the criticism in the voluntary carbon market that is associated with carbon offsets being traded that do not translate into the actual emission reductions they claim. The insurance products will raise the accountability of carbon credits and will ensure that the company’s purchased emission reductions will be delivered. It also helps corporate buyers of offsets to manage the risks associated with different types of offset projects.