BeZero Carbon, a carbon ratings agency, has launched the BeZero Carbon Portfolio Rating — an industry-first carbon credit portfolio rating framework.
The portfolio rating assesses the likelihood that a given basket of carbon credits achieves one tonne of CO2 reduced or removed for each portfolio credit issued.
A rating is assigned on an eight-point scale as the BeZero Carbon Rating — ranging from ‘AAA’, representing the highest likelihood of carbon avoidance or removal, to ‘D’, the lowest likelihood. Portfolios containing credits rated ‘C’ and ‘D’ or with significant additionality risks are ineligible for a rating.
The portfolio rating enables buyers to make credible, risk-adjusted claims using a composition of carbon credits, according to the firm.
Portfolios for the carbon market are expected to grow in popularity over time as a way to manage the risks associated with carbon markets. Ratings provide end-buyers with confidence in the use of carbon credits in their net zero strategies and are expected to accelerate investment in quality carbon credits.
Sebastien Cross, co-founder and chief innovation officer at BeZero Carbon, said: “Investors and corporates all over the world are increasingly looking to incorporate carbon credits into their net-zero strategies in a credible way. BeZero helps businesses understand carbon credits, and support them to procure projects that will deliver genuine climate impact — the BeZero Carbon Portfolio Rating is an expansion of this work.
“Mirroring the portfolio ratings of financial markets which have helped investors diversify and balance risk for decades, the portfolio rating is an essential step forward to mature the carbon market and enable this essential sector to grow and scale.”
