Climate finance company Solid World has announced the launch of its new CRISP (Carbon Risk Identification and Scoring Principles) tool, which is open to public use.
The Estonian startup has designed CRISP with the intention of revolutionizing the way forward carbon credit deals are evaluated and bringing more transparency to the rapidly developing Voluntary Carbon Market (VCM).
CRISP aims to provide a comprehensive framework to encompass some of the most critical factors leading to failure to deliver carbon credits by examining the key risks.
This enables stakeholders to make informed decisions and also offers support to climate projects.
Some of the major risk factors included in CRISP are: Carbon Yield Risk, Climate Catastrophe Risk, Financial Risk, Policy and Legal Risk, and Project Developer Risk.
Based on the above factors, all parties involved in the VCM, whether it be investors, project managers or developers, can assess their risks more accurately and help bring about meaningful climate action, which is why Solid World has released this framework as a public good.
The tool calculates net forward risk scores that can range from AAA (prime) to D (junk), based on the total of the separate risk factors.
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Solid World CEO Stenver Jerkku expressed the company’s desire to set a new standard for risk assessment and transparency in the industry and referred to CRISP as an invitation to all stakeholders to work together towards the common goal of mitigating climate change.
“By making our cutting-edge risk framework public, we invite leading players to collaborate and ensure accurate project risk ratings, ultimately transforming the underwriting process and fostering greater trust in the climate finance space,” Jerkku said.
Among the first to praise the new CRISP framework was carbon insurance company Kita, which stressed the importance of having such a tool in order to ensure higher levels of consistency and transparency ‘in reporting on delivery risk’.
Read more: Kita Secures £4 Million To Launch CO2 Insurance Products
