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Making Our Due Diligence Process Public

At CNaught, we believe that climate impact should be measurable, verifiable, and transparent. That’s why we’ve always held ourselves to the highest standards when it comes to the carbon credits we source. Now, we’re publicly sharing our full due diligence process - the same rigorous, multi-layered review every project in our portfolios must pass.

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This isn’t a new process for us, we’ve built our portfolios on the foundation of this process and quality since the beginning. But making it public is part of our commitment to greater transparency in the voluntary carbon market and to raising the bar across the industry.

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We’ll also be releasing a detailed white paper later this year, offering a deeper look at how we evaluate quality and what buyers should demand from their carbon credit partners.

Our 7-step Diligence Process

Our rigorous multi-step approach means that only about 15% of projects in the market meet our strict quality standard. Our approach is aligned with current best practices from sources like Stockholm Environment Institute and GHG Management Institute’s Offset Guide, and our commitment to these elevated standards ensures that the carbon credit portfolios we offer meet the highest standards of integrity.

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Phase I: Project Transparency Review

We start with a comprehensive screening phase, where we:

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• Verify full project documentation and transparency, ensuring availability of core documents like PDDs, monitoring reports, and boundary files
• Cross-check ratings from all four major carbon credit ratings agencies: BeZero, Calyx Global, Renoster, and Sylvera, and ensure the project is highly rated by at least one agency
• Reference additional data sources like Allied Offsets, CarbonPlan, and MSCI
• Conduct ESG and Reputational Risk Assessments including operational risks, environmental risks, social risks, governance risks, and reputational risk

‍Phase II: Four Pillar Quality Assessment

From there, projects that meet our baseline requirements undergo the second phase, our four-pillar quality evaluation, covering:

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• Additionality
• Over-Crediting
• Durability
• Double Counting

To evaluate risk, we examine multiple aspects across all four pillars:

A project must be low-risk across all four pillars to be included in our portfolios. Even one red flag disqualifies it.

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See it in Action

Below is an example of a real life Improved Forest Management project based in the U.S. Through our quality checks, we revealed additionality and durability risks which were verified by our third-party rating agencies. This project did not meet our quality bar and is not included in our portfolios.

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Why Use Multiple Ratings Agencies?

We are the one of the only providers who work with all four major independent ratings agencies. We think this is crucial because each rating agency brings a different methodology and perspective. By consulting all four, we get a more complete picture of project strengths and potential concerns. This also allows us to broaden our range of projects, dive deeper into underlying assumptions, and make better-informed decisions.

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We only purchase issued credits from projects that are highly-rated by at least one of these ratings agencies. When agencies provide differing assessments, we analyze their reviews and methodologies to identify key differences and determine which assessment is most appropriate for that specific project.

Our current “buy box” includes:

• Calyx Global: BBB or above
• Renoster: Neutral or above
• BeZero: A or above
• Sylvera: BBB or above

Every project we consider undergoes a thorough individual review to assess specific risks and overall defensibility. While we prioritize highly rated projects, we may occasionally include projects with a lower rating from one agency if our due diligence determines the project to be low risk and well-aligned with our quality standards. Conversely, if only one agency provides a positive rating and others raise valid concerns, we may choose not to include the project to maintain our high standards of defensibility and transparency. 

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Why This Matters

Carbon markets are shifting towards higher integrity. With more scrutiny than ever, and regulations like California’s AB 1305, buyers can’t afford to rely on vague claims or opaque diligence processes. You need confidence that every tonne you purchase is going towards real, additional, and durable climate impact.

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By making our due diligence process public, we hope to show what goes into a high-quality portfolio and help more companies ask the right questions and make better decisions.

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Want to Learn More?

We’ll be releasing a full white paper in the coming months with detailed methodology, examples, and best practices for buyers navigating the VCM. In the meantime, if you’re interested in evaluating your current portfolio, or are interested in purchasing a new one, we’d love to talk.

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📩 Reach out to our team or subscribe to our newsletter to get the white paper as soon as it’s live.