Greenly, the carbon accounting platform that helps 1,500+ companies worldwide measure and then reduce their carbon footprint, has announced its new Climate Rating System, using a points and medal system– Bronze, Silver, Gold and Platinum – in order “to measure the reality of their customers’ decarbonization trajectory.”
This recognition reflects companies’ commitment “to sustainable practices and their significant efforts to address climate challenges.”
The emphasis on transparency and responsibility of “the awarded companies aims to address the current lack of transparency in ESG ratings related to climate.” It also enables Greenly’s clients to access “a catalog of vetted low-carbon solutions.”
In 2023, a study from Scientific Beta “based on 25 ESG ratings from three major providers (Moody’s Analytics, MSCI Inc., and Refinitiv) revealed that well-rated companies do not emit significantly less carbon than those with lower scores.”
The correlation between ESG scores and carbon intensity “is nearly negligible, at around 4%.”
This means that there is currently “no reliable signaling effect to guide consumers or investors toward companies making the most substantial contributions to accelerating the energy transition.”
Alexis Normand, co-founder and CEO of Greenly, said:
“Despite their popularity among businesses and boards, ESG ratings do not reflect companies’ carbon impact. And with increasing regulation focused specifically on carbon emissions, businesses need to have clear decarbonization strategies which are grounded in reality.”
A Measurable and Transparent Methodology
To address this lack of visibility, Greenly’s Climate Analysts created “a straightforward rating system that involves a comprehensive assessment of a company’s greenhouse gas emissions, climate strategy, and environmental initiatives.”
Points are allocated in sections:
- Creating and fine tuning your Greenhouse Gas report
- Establishing a complete, transparent & precise baseline for your GHG journey
- Setting Paris Agreement-aligned climate targets
- Choosing transparent reduction targets, consistent with limiting global warming to 1.5°C
- Building a solid reduction strategy
- Building a reduction strategy consistent with meeting chosen targets, including sustainable procurement
- Involving your teams in your climate strategy
- Integrating the fight against climate change in corporate culture
- Offsetting remaining emissions
- Setting up an offsetting strategy to contribute to global Net Zero
A company’s performance across all parameters generates the Climate Score, with ratings ranging from E to A+. Companies with a rating of C and above are awarded medals, progressing on four levels from Bronze to Platinum:
- Bronze Medal: Certifies that a company has achieved a high level of transparency and can comply with potential legal obligations. In particular, it has published an emissions report, calculating its carbon footprint, including scopes 1, 2, and 3, and has published it on ADEME/CDP.
- Silver Medal: The company has also defined its action plans and decarbonization strategy.
- Gold Medal: The company has also certified its decarbonization efforts over several years, and complying with SBTi standards.
- Platinum Medal: The company and its products represent an environmentally responsible alternative compared to market standards.