Kita’s highlights from London Climate Action Week (and beyond!)
“Tackling climate change requires us to change everything we do faster than has ever happened before”
This is the opening statement of the London Climate Action Week promo video. And it captures the thread that has run through the many talks, presentations and launches we have attended: we desperately need to speed up our actions and responses to climate change.
At Kita, our mission is to provide carbon insurance products that enable individuals and organisations to act now. By insuring the future performance of carbon projects, our products increase investor confidence and reduce risk, enabling more transactions to happen, more quickly.
Our team have been busy this week attending and speaking at events across the capital and sharing our commitment to doing everything we can to encourage action now. Read on for some of our highlights and takeaways from LCAW – and beyond!
Renuka Shenoy, Carbon Analyst
I attended the VCMI Claims Code of Practice launch webinar on June 28th, which highlighted the code's importance as a toolkit for companies to maximise their use of the voluntary carbon market and achieve their net zero goals. As a carbon insurance company, at Kita we often discuss the need to de-risk the carbon market, and one of the primary concerns raised across participants is the lack of available climate finance on a sufficient scale. The VCMI Claims Code addresses this issue by enabling increased investment and progress through transparency, sense-checking of ambitions, and raising the overall integrity of carbon markets.
The code directly addresses concerns related to corporate climate claims, greenwashing, and ensuring that the credits used by companies truly benefit the planet. It adds value to businesses by creating a more credible market and a level playing field that allows companies to measure progress and learn from others. The code's development was the result of a two-year global collaborative process, bringing together stakeholders from diverse industries and regions.
To make a VCMI claim, companies need to comply with foundational criteria, select a specific claim, meet the required carbon credit use and quality thresholds, and obtain third-party assurance through the VCMI Monitoring, Reporting, and Assurance (MRA) Framework. Companies have the opportunity to make a VCMI public claim as early as November of this year, and the VCMI Stakeholder Forum, which launched alongside the code (and counts Kita as a member organisation!), includes 60 participants from various backgrounds and geographies.
The VCMI Claims Code of Practice complements the CCPs published by IC-VCM, with the two organisations providing coordinated expertise to operationalise the carbon market. The code aims to ensure that customers, investors, and stakeholders can clearly determine if a company is purchasing high-quality credits and if the claims associated with those credits have high integrity.
In conclusion, I agree that increasing scrutiny must be met with increasing credibility in the unregulated VCM. With the planet already approaching 1.2 degrees Celsius, integrity is crucial, and the VCMI Claims Code of Practice represents a significant step forward. I also believe that while the code is designed for the VCM, compliance markets can use it as a valuable guideline to enhance transparency and integrity in carbon credits, bringing much-needed clarity, credibility, and confidence to the market.
Eilís O’Keefe, Carbon Markets & Partnerships Analyst
On Monday, I went along to the Gold Standard Grow to Zero Conference in London. This year’s conference was centred around catalysing finance for impact. At Kita, we believe insurance is a key tool to unlock the capital flows required to scale carbon projects and their associated benefits. It was great to see insurance recognised during some of the talks, as a tool to mitigate risks (such as political risk).
A couple of my key takeaways from the conference were:
It is critical for us to scale up financing at speed. In order to do so, we must scale up but also scale back those ‘hidden hand breaks’ which are preventing financing.
Reputational risk was a key topic of conversation - it’s so important that we create an ecosystem which enables organisations to have the space to try investing in nature and carbon projects without a fear of being heavily scrutinised. Initiatives such as the VCMI Claims Code of Practice and SBTI BVCM can help to contribute to such an ecosystem.
It can be difficult to gain investment for nature, as it is a new asset class for investors. This is where insurers, such as Kita, can take on the risks faced by investors, to give them the confidence to invest large capital flows into nature based projects.
Tom Merriman, CPO and co-founder
I was particularly struck by a metaphor used by Harvey Locke in the ‘Investing in Nature Based Solutions’ panel discussion at Wednesday’s Climate Investment Summit. “WANTED DEAD OR ALIVE!” captures the paradox faced by investors in a world where nature is an unpriced externality. In the “Old West” Harvey explained, a reward was offered for captured fugitives: the same amount was available if they were delivered alive or otherwise. For the most part, the same seems to apply for modern-day investors; there is not enough added incentive for keeping nature alive when investing. This creates the paradox: a healthy return is produced even as we live in an increasingly unhealthy environment. However, as cap-and-trade and other Pigouvian taxes are introduced, there will be a clear benefit to delivering a healthy natural environment alongside healthy returns.
Regulated and voluntary carbon markets/taxes represent attempts to begin incorporating the cost of pollution into investors' return calculations. David Craig, Maria Nazarova-Doyle, CFA, Anita de Horde, and Martin Berg all spoke eloquently about why and how private capital can be deployed in nature-based solutions. Kita is working hard to help unlock this capital by providing a way of transferring risk away from investors' balance sheets through its innovative insurance products. Or to return to the Old West metaphor: if the fugitive is worth more alive than dead, would-be bounty hunters might want to explore some life insurance.
Natalia Dorfman, CEO and co-founder
It was a week with a lot of big conversations. From VCMI Claims Code of Practice, to inclusion of CDR within Article 6.4, to pros and cons of beyond value chain mitigation (BVCM), it is incredible to see the pace of change within the carbon markets and was wonderful to discuss implications with so many people, thus taking advantage of LCAW’s convening effect.