The voluntary carbon market is vital for sustainability because it can create positive environmental impact and generate financial returns. That being said, better information systems are needed to overcome some pain points.
The process of purchasing carbon offsets might be prohibitive for many businesses since it can be difficult to determine whether the offsets you buy are reliable. Investing in a defective offset entails a loss of money and hurts your reputation.
Enter carbon offset ratings agencies. They are independent third parties that, instead of selling carbon credits, rate carbon credits. They improve the quality of the market by assisting corporate purchasers with the due diligence that they might not otherwise be able to afford.
In this guide, I ranked and reviewed the top 4 carbon offset ratings companies in 2023.
- BeZero Carbon
- Sylvera
- Compensate
- Calyx
A good carbon offset ratings company should be independent and unbiased. They ought to clearly state how much you can depend on a credit’s assertions regarding its effects on CO2/climate, biodiversity, communities, and other factors.
What are the Top 4 Carbon Offset Ratings Companies in 2023?
My top picks are BeZero Carbon, Sylvera, Compensate and Calyx.
1. BeZero Carbon
BeZero Carbon, a UK-based company, scores eligible carbon credits across all industries. The startup’s current assessment of the chance that a particular credit results in a tonne of CO2e avoided or removed is reflected in the BeZero Carbon Rating (BCR).
The ratings platform is connected to the developing digital system that underpins carbon trading. BeZero grades offsets on six quality factors, averaging the results to produce a headline rating of seven points.
On BeZero’s scale, A represents the lowest likelihood of achieving 1 ton of CO2e avoidance or removal, AA represents moderate likelihood, and AAA represents a high likelihood.
Project Eligibility
The following requirements must be met by projects in order to qualify for a BeZero Carbon Rating:
- The project must have used an additionality test or have provided enough details to support its claim that it is additional.
- To assure the validity of the data and information published, the project must be audited by a reputable outside auditor.
- The public must always have access to enough information about the project’s planning and ongoing oversight. Non-public information won’t be taken into consideration.
Analytical Framework
The BCR adheres to a strong analytical framework that involves a thorough evaluation of six important risk indicators that have an impact on the caliber of credits given by the project.
Additionality
The possibility that a credit purchase and retirement does not result in the avoidance or sequestration of a ton of CO2e that would not have occurred otherwise.
Non-permanence
The possibility that the carbon avoided or removed by the project won’t do so throughout the duration of the commitment, plus any informational risks.
Perverse incentives
The possibility of a project’s benefits, such as offset revenues, encourages behaviour that lessens efficacy.
Over-crediting
The possibility that a given project would issue more credits than actual tons of CO2e due to things like irrational baseline assumptions.
Leakage
The chance that emissions a project avoids or removes are pushed outside its boundaries.
Policy
The chance that the policy environment will make the project less effective in reducing carbon.
Visit their website for more information.
2. Sylvera
Sylvera’s large and growing team of experts works across Multi-Scale Lidar, Geographic Information System (GIS), Ratings and Machine Learning disciplines to collect, analyze and distill data for every project, then builds robust and bespoke ratings frameworks and production systems for each project type.
Carbon Project Reports
The diverse professionals at Sylvera examine each project using proprietary data and machine learning technology. They condense the research into insightful commentary and give each initiative a distinct Sylvera rating.
Carbon Ratings
Voluntary carbon markets are made transparent by the Sylvera Carbon Credit Ratings system. The overall study of a project’s carbon performance, additionality, and permanence yields each rating. The carbon rating system also assesses the project’s co-benefits to the environment and nearby communities.
Visit their website for more information.
3. Compensate
Compensate, which has its headquarters in Helsinki, is made up of specialists on climate change, corporate executives, tech entrepreneurs, communicators, and an independent panel of eminent scientists.
Compensate Foundation
The Compensate Foundation concentrates on lobbying efforts to strengthen the transparency of the voluntary carbon market. Businesses, governments, nonprofit groups, universities, municipalities, and people can offset their emissions or support initiatives that reduce emissions or remove carbon from the environment for other purposes thanks to the voluntary carbon market.
Carbon Store
Compensate’s Carbon Store is a place for businesses to purchase high quality carbon credits to offset unavoidable emissions. The store provides access to free emission calculators, and allows you to communicate your climate actions with impact reports and certificates.
Carbon Store API
You can integrate emission calculation and compensation using the Carbon Store API in digital services like web stores or applications. You can either provide your customers the choice of offsetting or include the cost of it in the price of your goods and services.
Tailored Carbon Offsetting
Since carbon project ratings are hardly one-size-fits-all, certain businesses could need custom carbon offsetting strategies. The all-inclusive services provided by Compensate include carbon footprint estimation, emission reports, carbon offsetting, a dashboard for monitoring climate effect, and communications assistance.
Visit their website for more information.
4. Calyx
Carbon rating services are offered by Calyx Global with the goal of providing quality and impact ratings for carbon credits. The firm gives customers the resources they need to make better educated decisions regarding carbon credits by providing services including impact ratings for carbon credits, API tools, and greenhouse gas carbon rating.
The company offers three services, namely:
- Calyx Ratings Service
- Calyx Project Reports
- Calyx Data Integration
Calyx Ratings Service
This service offers online access to the most recent GHG Risk report from Calyx Global, which assesses the possibility that credits do not, as claimed, represent one ton of CO2 that has been removed or reduced, as well as SDG Impact Ratings, which assess project claims of an impact on the UN Sustainable Development Goals.
Calyx Project Reports
You can get even more details regarding the GHG integrity risk, the impact on the SDGs, and the data and analysis that underpin Calyx Ratings with Calyx Project Reports.
You will have access to expert opinions on the main GHG integrity threats and how they have evaluated projects’ claims of effect on particular SDGs.
Calyx Data Integration
Calyx Ratings can be included with Calyx Data Integration into your own processes and systems as well as into customer offers. Investors and traders can include Calyx Ratings into their portfolio and risk management systems, and brokers, marketplaces, and exchanges can include them in their apps.
Project Types
Calyx covers a wide range of project types, including:
- Afforestation / Reforestation
- Biodigesters
- Improved Cookstoves
- Grassland Management
- Hydropower
- Improved Forest Management
- Landfill Gas
- Leak Detection and Repair
- Manure Management
- Ozone Depleting Substances
- REDD / Avoided Deforestation
- Solar
- Wastewater
- Wind
- Process Improvement
Visit their website for more information.
Summary
Even though carbon offsetting remains a topic of debate, there is no doubt that it can be a powerful tool to fight climate change, if we are equipped with the right tools to enhance the transparency of the carbon market, such as robust carbon ratings.
