Engaging with developers - our year in review
Right from the start of 2024, BeZero’s Developer Engagement team regularly heard that securing early stage investment was both a priority and a challenge for carbon project developers. With $4 being spent in the pre-issuance market for every $1 spent in the post-issuance market, there was a clear disconnect and an opportunity to be harnessed.¹
Equally, the role of ratings as a solution for assessing quality was becoming more widely accepted among the supply side. In the current market context where integrity is being questioned and scrutinised, the role of ratings has become more critical than ever to instil newfound confidence, and cultivate a higher integrity market.
As such, one of our core team goals for 2024 was to help developers leverage independent ratings as a tool to improve and demonstrate project quality to their investors and buyers.
In this article, we explain how we have worked to address developer’s concerns through tailored resources, hosting events, and building on our own processes to improve communication and transparency.
Out and about
Throughout 2024, our team attended four conferences: North American Carbon World (NACW), IETA European Climate Summit (ECS), Climate Week in New York (CWNYC), and IETA Asia Climate Summit (ACS). One of the most notable trends we observed was the evolving reception to ratings, both pre and post issuance (i.e., ex ante and ex post). It was interesting to see how conversations progressed over the past year, with many developers now clearly recognising the part independent ratings have to play in reflecting quality and securing financing.
At NACW, we heard developers acknowledging the impact ratings were having on credit price, a sentiment that grew stronger over the course of the year. At more recent events, developers echoed that ratings had become a necessity, with buyers requesting them in RFPs or even stipulating that a certain percentage of a portfolio must be rated, often at a specific threshold rating or higher. It is clear that buyers are increasingly focused on reducing risk, and developers see how ratings can help them meet this need. Ratings are influencing the sale of credits by driving both interest and higher prices, with the latest data indicating an average price premium of 40% per BeZero rating notch.
“The market needs independent, third-party information and we’re excited to see BeZero supporting market transparency, accountability and integrity.”
-WeAct
BeZero’s ex ante Carbon Ratings had a lot of traction early on in 2024 following their launch in late 2023. In line with this, we hosted a workshop at NACW focused on what buyers and investors expect from carbon projects in the pre-issuance phase. The aim was to provide developers with actionable insights on what information is most valuable to those considering investments in early-stage projects. It was positive to circle back on conversations again later in the year and hear how ex ante ratings have been instrumental in project design, attracting partners, and securing financing.
While conferences are an essential gathering point for key market stakeholders, a recurring theme was the need for more buyer representation. Although the supply side was well represented through panels, stands, and plenary sessions, there was a noticeable absence from the demand side, with developers missing opportunities to engage with potential buyers and investors. This gap has been a source of frustration, as these events are crucial for market education, especially as market processes and intelligence evolve. We are confident that this will change in the years to come as the demand side gains a stronger understanding of the market and the opportunities presented when engaging directly with stakeholders. To support this market education we’ve been running a dedicated insight series.
“BeZero is helping buyers differentiate between similar seeming projects, providing valuable market insight and external proving. This knowledge and value differentiation for buyers makes BeZero a valuable partner for EcoSafi.”
-EcoSafi
We are exploring what events our project developer engagement team will attend in 2025 and will list these on our Events page - stay tuned.
Our year in numbers
2024 was a big year for BeZero and particularly our Developer Engagement team. Our team communicates with developers at every stage of the rating process, and is on hand to answer questions.
*This accounts for all information requests completed to date.
Developers use insights gained from the rating brief to communicate and differentiate their rating with buyers and investors. In total we have shared over 200 rating briefs with developers.² This is also crucial in our commitment to transparency.
BeZero requests additional project information from developers to ensure the rating is as comprehensive and fair as possible.
To date, the team has confirmed the developers for 398 ex post projects. 98 developers were confirmed in 2024. This is to establish a point of contact for communication and ensure developers have visibility of their ratings.
We have observed growing engagement from developers with our rating process, particularly in enhancing market transparency by disclosing project documentation in response to our conversations. Numerous developers have created dedicated webpages to upload additional project documentation, improving information accessibility. For scenarios where developers don’t feel comfortable doing this, in 2024 we adapted our data transparency process to accept Non-Public Information. This reflects our commitment to working with developers to find a solution tailored to them, for example we’ve worked with several NBS developers to obtain semi-anonymised spatial data for analytical purposes. This has allowed many developers to share sensitive data with us privately, following our stringent NPI process. Additionally, more developers are integrating their ratings into financial discussions and sharing feedback on their ratings.
Resources and events
The Developer Engagement team is consistently looking to create useful and customised resources for project developers. This included three new additions for 2024:
Guide to communicating project ratings - we saw a significant increase in developers communicating their ratings via press releases and social media announcements this year, so we created a guide to help developers who want to promote their ratings.
FAQ document - developers noted that sometimes explaining the role of a rating agency to their project partners is a challenge, so this FAQ covers the simple who, why, and what of our ratings and developer outreach and is available in French, Hindi, Mandarin, Portuguese, and Spanish.
Developer webpage - with a growing volume of developer focussed resources and events, we created an information hub for developers.
We also organised tailored events designed to bring our network together. Looking ahead, we are excited to continue developing our events programme for the year to come. Let us know if there are specific webinar topics you'd like us to consider.
Post COP29 briefing: what was agreed? - Following COP29, our Chief Innovation Officer and Co-founder Sebastien Cross was joined by industry experts to discuss the outcome of the Article 6 negotiations, other announcements made at COP, and what this means for the future of carbon markets.
ARR insights - BeZero’s ARR Lead and Senior Remote Sensing Scientist gave an overview of how our geospatial and Earth observation capabilities feed into our assessments of projects in this sector.
LATAM Focus - in our first webinar in Spanish, we provided an introduction to our methodology, process, and the importance of ratings in the Latin American market.
NACW workshop - this in-person workshop focussed on what buyers and investors want to see from carbon projects in pre-issuance stages.
Co-hosted event at Climate Week NYC - this event brought together project developers during one of the busiest climate events of 2024. A key topic was the role of ratings and how they can be leveraged when developing future projects.
Having built a strong foundation in the market in 2024, we have big plans for 2025. First up, is to showcase how developers can leverage our recently launched project fundamentals data. As the market continues to transform, particularly in the wake of recent Article 6 announcements and new opportunities with CORSIA, we want to increase the number of webinars and in-person events we are hosting to establish a cohesive network centred around problem solving and forward thinking. The end goal is to encourage the development of high-integrity projects so carbon finance has the greatest possible impact.
For more information on how we work with developers, speak to our team.
References
MSCI, Ecosystem Marketplace, BeZero analysis
A rating brief is a document containing our complete rating analysis that we send to every confirmed project developer. This takes place for new ratings as well as reviews.