NEW YORK -- MSCI Inc. (NYSE: MSCI), a leading provider of critical decision support tools and services for the global investment community, launched MSCI Carbon Project Ratings to enable buyers, investors, and developers of carbon credits to better assess the quality and integrity of carbon projects.

“Carbon markets are critical to accelerating decarbonization and meeting net-zero goals, but only 5% of projects on the market are considered to be of very high integrity,” said Guy Turner, Head of MSCI Carbon Markets. “Lack of confidence in the quality and integrity of projects is causing some buyers, investors and developers to hesitate.”

To help clients navigate this challenge, MSCI Carbon Project Ratings assess over 4,000 projects in the global carbon credit market[1] to offer more comprehensive, investment-grade, independent assessments of integrity and risks. Criteria considered in MSCI’s assessment include a project’s impact on the climate, environment and society, as well as legal and ethical risks, including financial crime, fraud, and sanctions.

“MSCI Carbon Project Ratings give clients the confidence to stake their strategies, capital and reputations on carbon credits while allowing them to compare credits across the entire market, mitigate risks from investment decisions, and fulfill disclosure requirements,” added Turner.

Through a transparent and rules-based methodology that leverages MSCI’s independence and expertise in setting industry standards for climate investing, each individual project is assessed in depth against six criteria and over 50 sub-criteria broadly categorized under emissions impact and implementation integrity. The rating is a composite of these two categories and based on a seven-point letter rating scale from AAA to CCC. Projects rated AAA have both a high likelihood of achieving a 1 tonne emissions impact per credit and being implemented in a way that supports positive social and/or environmental outcomes, while upholding legal and ethical standards.

MSCI Carbon Project Ratings integrate with the full suite of MSCI Carbon Markets solutions to provide integrity-based insights across the market, from integrity-based price indexes to assessments of corporate climate performance.