BeZero Carbon Ratings Methodology

The BeZero Carbon Rating (BCR) of voluntary carbon credits represent BeZero Carbon’s current opinion on the likelihood that a given credit achieves a tonne of CO2e avoided or removed.

BeZero Carbon Rating scale 

The BCR is conveyed using a seven point alphabetic scale across three categories: 

BeZero Carbon may apply ‘+’ (plus) or ‘-’ (minus) signs for ‘AAA’ and ‘AA’ ratings to reflect comparative standing within the category. 

Qualifying criteria 

Projects must fulfil the following criteria to be eligible for a BCR:

 A. The project must have applied an additionality test or provide sufficient information on how it is deemed additional. 

B. The project must be audited by a recognised third party auditor in order to ensure the robustness of the data and information published. 

C. Sufficient information on the design and ongoing monitoring of the project must be available in the public domain at all times. Non-public information will not be considered. 

See our full qualifying criteria here.

Analytical framework 

The BCR follows a robust analytical framework involving detailed assessment of six critical risk factors affecting the quality of credits issued by the project: 

- Additionality 

- Over-crediting 

- Non-permanence 

- Leakage 

- Perverse Incentives 

- Policy and Political Environment 

BeZero’s risk factor definitions, and the analytical framework for their application, are detailed in Appendix 1.

BeZero Carbon Rating process 

The BCR is derived using a four stage process. 

Stage 1: macro factor assessment 

A top-down assessment is made according to each of the following characteristics of a project’s credits:

- Country: BeZero makes an assessment on the country- specific risks a project faces, including the strength of the property rights in a project’s location and how supportive the policy environment is to the success of the project’s credits. 

- Sector: there are three levels to the BeZero sector classification: sector group, sector and sub-sector. BeZero makes an assessment of the general risks a project is exposed to at each sector level. For example, we assess the relative cost-competitiveness of solutions in different sectors. 

- Methodology: BeZero makes an assessment on how the accreditation methodology followed by a project impacts its risk exposure. For example, we assess the different ways a project baseline can be set through a given methodology. 

Once complete, BeZero assigns initial scores for each of the six risk factors facing the project.

Stage 2: project specific assessment

The next step is to make an assessment of project- specific risks.

All publicly available information relevant to the project’s credits are taken into consideration including, but not limited to:

- An assessment of all accreditation documents

- Any additional documents published by the project

- Peer reviewed research papers

- Industry literature

- Social and economic data

- Location specific research or documentation

- Any other relevant indices and metrics

Considerations made at this stage include, but are not limited to:

- The additionality test applied

- The baseline set by the project

- The time period committed to by the project

- The change in carbon stocks and any leakage considerations

- Any additional risks accounted for by the project

Once complete, the risk factor scores arrived at in stage 1 may be adjusted up or down to reflect both the macro and project specific risks.

Stage 3: risk factor weighting 

To arrive at a provisional BCR, each risk factor is assigned a specific weighting and the product of these are summed. The weightings are based on the team’s assessment of a risk’s relative importance to the overall rating. The individual risk factor weightings are presented in the chart below: 

A minimum of 80% of total risk factor weightings must be accounted for in order for a project to be given a provisional BCR. 

In the event that insufficient evidence has been found to assign a score to a risk factor, that factor receives a weighting of zero. The weight of this score is then re-distributed across the remaining risk factors, In proportion to their risk weighting. This approach ensures that the overall rating is assigned based on an aggregate risk weighting of 100%.

Stage 4: BCR committee review 

The BCR committee formally reviews all provisional ratings. 

The committee is made up of all BCR Analysts, and is chaired by a senior member of the ratings team. 

At the committee, BCR Analysts present their analysis and BCR recommendations. 

The committee’s role is to interrogate their recommendation by asking questions and/or seeking clarifications. 

If the BCR committee requires additional information or clarification which cannot be addressed at the meeting, the rating remains provisional until all outstanding issues are deemed as resolved by the BCR committee. 

Unanimous approval by the BCR committee is required for a final BCR to be assigned. 

BCR monitoring and “watch” process 

All credits assigned a BCR are monitored on an ongoing basis, and the BCR may be revised at any time based on changes to, addition or withdrawal of published information. 

If a BCR is subject to change, the assigned credit is placed on “watch”. This is intended to alert the market of potential positive or negative changes to the assigned rating. 

In order to be put on “watch”, BeZero Carbon must be aware of publicly available information that is deemed by the BCR committee to potentially have a material impact on the rating. Such information may include, but is not limited to: 

-new project accreditation documents, 

-additional information published by the project, 

-any additional information or data deemed relevant to a project, 

-withdrawal of material information from the public domain. 

When a project is officially placed on “watch”, the review process is the same as Stage 4 outlined above. A rating will remain on “watch” until the BCR committee unanimously approves a change in rating or reaffirms the rating at current levels. 

Limitations of the BCR 

The BCR represents BeZero Carbon’s current opinion on the likelihood that a credit achieves a tonne of CO2 e removed or avoided. Factors relevant to this assessment only are considered. 

A full BCR may only be applied to issued, ex-post credits. It is not a forecast of future carbon achieved nor does it aim to give information on the likelihood of future credit issuance by a given project.

Assigning a credit with a BCR is not a recommendation to invest, buy, hold, or sell a carbon credit. It is not a statement of truth and should not be relied upon as a statement of fact. 

A BCR is one of the inputs used by stakeholders to understand the overall quality of any given carbon credit. 

Appendix 1 - risk factor definitions and analytical framework matrix

Click here to download the full document.