Carbon accounting platform Greenly has unveiled a new climate rating system designed to track the decarbonization efforts of businesses. This innovative points-based framework aims to provide a clear assessment of how companies are progressing towards their carbon reduction targets while enhancing transparency around their emissions impact.
Currently, many organizations grapple with accurately measuring their adherence to carbon reduction goals, often hindered by misleading ESG (Environmental, Social, Governance) ratings that can obscure the true environmental impact of their operations. A recent study from Scientific Beta highlights this issue, revealing that companies with high ESG ratings do not significantly lower their carbon emissions compared to those with lower ratings. As a result, relying solely on ESG scores to gauge a company’s commitment to emissions reduction has become increasingly unreliable.
In stark contrast, Greenly’s climate rating system offers a comprehensive analysis of greenhouse gas emissions as well as the sustainability initiatives and projects implemented by businesses. This approach ensures a more factual representation of a company’s climate performance.
Alexis Normand, the CEO and co-founder of Greenly, emphasized the urgency of the situation, stating, “We are not on track with the Paris Agreement objectives for decarbonization. As investors look to fund the energy transition and businesses aim to stay relevant in a climate-conscious world, they face a critical choice: focus on meaningful carbon reduction or chase after a high ESG score. Often, these objectives can be at odds, making it essential to differentiate between authentic decarbonization efforts and superficial ESG presentations. Our Climate Ratings System is designed to achieve this clarity.”
The rating process evaluates companies across various categories, including the preparation of greenhouse gas reports, establishing climate goals aligned with the Paris Agreement, and implementing measures to offset remaining emissions. Performance is rated on a scale from E to A+, with companies that score C or above receiving a medal—awarded in bronze, silver, gold, or platinum tiers.
Among the organizations recognized with Greenly’s Climate Action Medal are Pomelo, share(d), and Exaprobe, highlighting their commitment to sustainable practices in the pursuit of climate goals.