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1. PURPOSE
Boomitra is a global leader in leveraging AI, satellite technology, and on-the-ground partnerships with farmers and ranchers to generate high-quality, independently verified soil carbon credits. Operating at the intersection of climate technology, sustainable agriculture, and carbon markets, we recognize that effective risk management is essential to safeguarding our mission, protecting our stakeholders, and ensuring long-term resilience.
This Risk Management Policy establishes a structured framework for identifying, assessing, mitigating, monitoring, and reporting risks that may impact Boomitra’s strategic objectives, financial stability, operational effectiveness, and regulatory compliance, thus safeguarding our reputation and helping deliver on our mission to regenerate agricultural lands and empower farming communities worldwide. It is designed to foster a culture of risk awareness, accountability, and continuous improvement across all levels of the organization.
2. OBJECTIVES
a) Protect Boomitra’s financial and reputational integrity. b) Ensure alignment with international standards and carbon credit registries (e.g., Verra, Social Carbon, Gold Standard). c) Safeguard the rights and livelihoods of farmers, ranchers, and local communities engaged in our projects. d) Uphold legal, ethical, and contractual obligations across all jurisdictions in which we operate. e) Promote transparency, accountability, and a culture of risk awareness across the organization.
This policy is a living document and will be periodically reviewed and updated in response to emerging risks, industry developments, and regulatory changes.
3. SCOPE
This policy applies globally to all Boomitra’s business activities and functions, including:
a) All Boomitra employees, contractors, partners, and consultants. b) Subsidiaries, affiliates, and implementation partners. c) All projects, operations, and business activities, including carbon project development, technology deployment, community engagement, financial transactions, and credit sales.
It is integrated into Boomitra’s corporate governance, strategic planning, project development cycles, and daily operational decision-making.
This Policy will be read in conjunction with Boomitra’s Whistleblowers Policy, Employee Code of Conduct, Partner Ethics Policy and Code of Conduct, Confidential Information and Invention Assignment Agreement, Sexual Harassment Policy, Third Party Harassment Policy, Grievance Policy for Partners and Enrolled Farmers and Landowners, Employee Grievance Policy, Data Protection and Retention Policy, Quality Assurance Policy, Disaster Recovery Policy, Health, Safety and Environment Policy, Environmental, Social and Governance Policy, Diversity, Equity and Inclusion Policy, Modern Slavery Policy, and any other related policies that may be published in future.
4. RISK CATEGORIES
a) Project and Methodological Risks
These risks are central to Boomitra’s core business in producing verified high-quality soil carbon credits.
i. Methodology Risk: The risk to scientific integrity that our soil carbon measurement methodologies are challenged by auditors, registries, or scientific bodies, potentially leading to project rejection or a decrease in credit value. Mitigation: Continuous alignment with recognized standards, peer-reviewed validation, and participation in industry forums.
ii. Validation and Verification Risk: Failure to meet Registry and Validation/Verification Body (VVB) stringent standards and requirements could result in credit rejection. A failed audit could result in significant financial losses and reputational damage. Mitigation: Robust pre-audit internal reviews and quality assurance protocols.
iii. Permanence Risk: Reversal of sequestered carbon due to climate events (e.g., droughts, floods, wildfires) or changes in land management practices, whether unintentional or deliberate, which would require the retirement of corresponding credits. Mitigation: Buffer credit allocations, farmer training, and long-term contractual agreements.
iv. Additionality Risk: The risk that a project’s activities would have occurred even without carbon finance. Registries require a clear demonstration that carbon finance is a necessary incentive for the project to proceed. A lack of additionality can lead to project invalidation. Mitigation: Transparent documentation, independent validation, and strict adherence to registry criteria.
v. Baseline Risk: The risk that the project’s baseline scenario — the “business-as-usual” scenario against which emission reductions are measured — is not accurately established and could inflate credits. An over-estimated baseline can lead to the over-issuance of credits. Mitigation: Rigorous data-driven baseline assessments and conservative assumptions.
vi. Sampling and Measurement Risk: Risks associated with the accuracy and representativeness of soil sampling, data collection, and remote sensing technology, which could lead to inaccurate measurements of carbon sequestration, including errors in soil sampling, data collection, or satellite interpretation. Mitigation: Proprietary AI-driven DMRV (Digital Measurement, Reporting, and Verification), cross-verification, and independent audits.
b) Financial and Commercial Risks
These risks directly impact our revenue, profitability, and financial stability.
i. Market Risk: Volatility in voluntary and compliance carbon markets impacting credit pricing, which could negatively affect projected revenue. This includes fluctuations due to supply, demand, and regulatory changes.
ii. Liquidity Risk: Insufficient working capital to meet short-term financial obligations, including operational costs and payments to partners and farmers.
iii. Credit Risk: Buyer default on carbon credit purchase agreements, including pre-purchase agreements, where a buyer fails to pay on time or defaults on their contractual obligations.
iv. Currency Risk: Adverse foreign exchange fluctuations affecting multi-currency operations, particularly for projects in the Global South.
v. Cost Overrun Risk: Unexpected increases in project or audit expenses over the allocated budget, reducing profit margins.
Mitigation: Diversified revenue streams, conservative budgeting, legal safeguards in credit purchase agreements, and hedging strategies for FX exposure.
c) Operational and Strategic Risks
These risks relate to our internal processes, technology, and long-term strategic direction.
i. Technology Risk: System failures and downtime, performance failures, data breaches, or inability to scale proprietary MRV platforms with project growth.
ii. Legal and Regulatory Risk: Non-compliance with national and international laws and regulations, land rights laws, carbon market regulations, cross-border tax, trade laws, and business operations in various jurisdictions.
iii. Reputational Risk: Negative perception due to failed audits, farmer disputes, poor communication, ethical issues, or external criticism of carbon markets. Given the scrutiny on carbon markets, a strong reputation is a vital asset.
iv. Talent Risk: Difficulty in retaining or attracting top scientific, engineering, and field expertise needed to achieve our goals.
v. Partner Risk: Disruption in partner engagement, or misalignment or underperformance of NGOs, cooperatives, or agribusiness partners leading to delays in project implementation.
vi. Farmer Participation Risk: Withdrawal of farmers or reversion to conventional practices undermining carbon permanence.
d) External and Environmental Risks
These are risks beyond our direct control but which can have a significant impact.
i. Political/Geopolitical Risk: Regulatory shifts, political instability, or land-use policy changes in project regions that could disrupt operations or invalidate projects.
ii. Climate-Related Risk: Adverse weather (e.g., droughts, prolonged heatwaves, floods) or long-term climate stress impacting soil carbon permanence and project performance.
iii. Force Majeure: Natural disasters, pandemics, civil unrest, or events beyond Boomitra’s control that prevent project completion or credit generation.
5. RISK MANAGEMENT PROCESS
Boomitra follows a five-step process, consistent with international risk management standards (e.g., ISO 31000):
a) Risk Identification: Managers and teams will proactively and continuously identify potential risks. Risks are identified through quarterly workshops, project audits, community feedback, industry monitoring, and compliance reviews. All identified risks are logged in a centralized, accessible risk register.
b) Risk Assessment: Each risk is scored based on impact and likelihood on a scale of 1 to 5 for each dimension. The resulting score (Impact x Likelihood) will determine the risk’s priority level — Low, Medium, High, or Critical — guiding resource allocation and mitigation efforts.
c) Risk Mitigation: For all risks scored as Medium, High, or Critical, a specific mitigation plan will be developed and assigned to a responsible owner. Tailored strategies include:
d) Monitoring and Review: Ongoing monitoring through a central risk register, with quarterly executive review and Board-level oversight. High-priority risks will be monitored monthly or more frequently as needed. The effectiveness of mitigation plans will be evaluated, and risk scores will be updated based on new information.
e) Reporting: Significant incidents must be immediately escalated to the Executive Team. Quarterly risk reports are presented to the Board of Directors.
6. LEGAL AND COMPLIANCE FRAMEWORK
Boomitra commits to compliance with:
a) International Standards: Adherence to methodologies approved by Verra, Social Carbon, and other recognized registries. b) Data Protection Laws: GDPR, CCPA, and equivalent frameworks for farmer and partner data. c) Land Rights and Contract Law: Respect for farmer ownership and contractual recognition of carbon rights. d) Anti-Corruption and Anti-Money-Laundering: Compliance with global anti-bribery and anti-money laundering regulations in all jurisdictions. e) Tax and Trade Laws: Alignment with applicable laws for cross-border carbon credit sales.
All contracts with partners, farmers, and credit buyers will include force majeure, indemnification, dispute resolution, and governing law clauses to ensure legal enforceability and risk transfer where appropriate.
7. ROLES AND RESPONSIBILITIES
a) Board of Directors: Provides strategic oversight, defines risk appetite, and approves the Risk Management Policy. b) Executive Team: Implements the policy, allocates resources, and monitors and reviews critical and highest priority risks. c) Risk Management Committee: Cross-functional group responsible for maintaining the risk register, reviewing incidents, and recommending mitigation strategies. d) Department Heads and Managers: Identify and manage risks in their domains, ensure mitigation plans are executed, and escalate significant risks to the Risk Management Committee. e) All Employees: Contribute to risk awareness by promptly reporting potential risks or incidents to their supervisors. This may also be reported under the company’s Whistleblowers Policy.
8. REVIEW AND CONTINUOUS IMPROVEMENT
This policy will be reviewed annually or more frequently if required by:
a) Regulatory changes. b) Material project, market, or technological developments. c) Lessons learned from risk incidents.
Boomitra is committed to continuous improvement in risk management, ensuring that our approach remains responsive to the evolving landscape of global carbon markets, community needs, and climate realities.
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