BeZero publishes industry-first public ex ante rating
BeZero Carbon has issued the industry’s first ever public rating of a carbon credit project, before it has begun issuing any credits.
Ex ante ratings will help the voluntary carbon market scale, helping buyers understand project risk from an early stage.
For every dollar invested in the secondary market, three to five dollars are invested in the primary market - ex ante ratings help grow this investment, boosting investor confidence and enabling buyers to inject capital into impactful projects before credits hit the market.
BeZero Carbon, the global carbon ratings agency, has today published the first ever public carbon rating of a project yet to issue any credits - an industry first.
The BeZero ex ante Rating assesses the likelihood that carbon credits produced by a project will remove or avoid a tonne of CO₂e before those credits hit the market - while also assessing the risks of executing the project.
The first ex ante rating assessed an Improved Forest Management project in South East Asia, which seeks to protect a large area of forest through managing land differently and preventing logging. BeZero rated the project ‘Ae’ - meaning credits issued by the project will have a high likelihood of removing or avoiding a tonne of carbon.
BeZero Carbon’s pioneering work on ex ante ratings is crucial to the development and scaling of the voluntary carbon market (VCM). Currently, for every dollar transacted in the secondary market (where carbon credits have already been issued), an estimated three to five dollars are invested in the primary market, where carbon projects are being developed.
An estimated $10 billion is invested annually in the primary market, and it is here that project developers, investors and buyers inject significant capital to help projects develop from the design stage to implementation and carbon credit issuance.
The ex ante rating will help organisations looking to invest in the VCM - providing a vital toolkit so they can understand pre-issuance risk and channel their capital into impactful environmental investments. The ex ante rating will help build stakeholder confidence in a project’s performance from the earliest possible stage.
In turn, this will help finance the global climate transition. Billions of dollars are needed to facilitate the race to Net Zero which cannot come from governments alone. With the right risk-based ratings frameworks in place, the VCM can grow to become one of the most important tools to mobilise private finance into projects which reduce global emissions.
Tommy Ricketts, CEO and Co-founder of BeZero Carbon, said:
“In order to scale climate action, businesses need to be prepared to innovate and do things differently - and this is exactly what we’re doing with the industry-leading ex ante rating. Billions of dollars are committed to projects in the primary market each year, but in order to bring about real change, this needs to scale. Our ex ante rating provides buyers with robust assessments of projects before any credits are issued, so they can direct capital with confidence into the projects that can have the most impact.”
Unlike our ex post BeZero Carbon Rating, the BeZero Carbon ex ante Rating is not always publicly available - this is only done with the agreement of the rating commissioner.