Due Diligence Process

Overview Project Transparency
Review Third-Party Ratings
Assessment ESG & Reputational
Risk Review Four-Pillar Quality
Evaluation Due Diligence in
Action

Our Due Diligence Process

At CNaught, we are committed to offering only diversified portfolios made up of high-integrity carbon credits to our customers. We understand the importance of trust and transparency in the carbon market, which is why we have built a rigorous, multi-layer diligence process. This process combines a thorough internal assessment with independent third-party evaluations from leading ratings agencies. In fact, CNaught is one of the only companies to leverage ratings from all four top agencies — BeZero, Calyx Global, Renoster, and Sylvera — to ensure we remain at the forefront of quality in the VCM. Our approach is aligned with current best practices from sources like Stockholm Environment Institute and GHG Management Institute’s Offset Guide.

Our commitment to these elevated standards ensures that the carbon credit portfolios we offer meet the highest standards of integrity, providing our customers with the confidence needed to invest in projects that deliver real and impactful climate results. Our rigorous multi-step approach means that only about 15% of projects in the market meet our strict quality standard.

Phase I: Project Screening

Project Transparency Review

We begin by verifying that all project documentation is complete, accurate, and publicly available. This includes:

Project Design Document (PDD), Monitoring Report (MR), and Verification Report (VR) for each issuance
For CCB or SDVista projects, all corresponding documents must be available
For nature-based projects, we verify boundary files to ensure they align with the project documentation

We ensure all essential information is transparent and accessible, requesting any missing elements directly from project developers when necessary.

Third-Party Ratings Assessment

We are the one of the only providers who work with all four major independent ratings agencies – BeZero, Calyx Global, Renoster, and Sylvera. We check the project against all available ratings for their latest assessments. We also check supporting sources like Allied Offsets, CarbonPlan, and MSCI.

These ratings agencies apply rigorous, science-based methodologies to assess carbon credit projects across multiple dimensions, including additionality, over-crediting risk, permanence, and environmental co-benefits. Their reviews are conducted by teams of subject matter experts and provide an additional layer of confidence in the projects we offer.

CNaught only purchases issued credits from projects that are highly-rated by at least one of these ratings agencies. This ensures that all projects we offer consistently meet our rigorous standards for quality. 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. Read our blogpost for more information on why consulting multiple rating agencies is valuable.

Our Buy Box:

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.

ESG & Reputational Risk Assessment

Once we’ve reviewed a project’s third party assessments, we evaluate broader environmental, social, governance, and reputational risks, including:

Operational Risks
Environmental Risks
Social Risks
Governance Risks
Reputational Risk

If there are any potential areas of risk across any risk category, we will investigate the issue and evaluate whether the project or developer has addressed it credibly. Any unresolved or material reputational risk may result in exclusion from our portfolios.

Phase II: Four-Pillar Quality Evaluation

Projects that pass our screening criteria for data transparency and third-party ratings then undergo a rigorous assessment across our four quality pillars. We perform this assessment by combining both the insights and data provided by third-party ratings agencies with our own internal review of the project. Each project must be rated low risk across all four pillars to be eligible to be included in a CNaught portfolio. If a project is high risk in any of the four pillars, it will be excluded from all portfolios.

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

Additionality

Over-Crediting

Durability

Double Counting

✔️ Financial Additionality
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✔️ Regulatory Additionality

✔️ Common Practice

✔️ Baseline Emissions

✔️ Project Emissions

✔️ Leakage

✔️ Buffer Contributions

✔️ Potential Reversal Risks

✔️ Mitigation Strategies

✔️ Community Engagement

✔️ Single Registry Listing

✔️ Project Area Overlaps

✔️ Potential Conflicts

By combining the best available third-party assessments with our own internal expertise, CNaught ensures every credit in our portfolios represents meaningful climate action. Our process goes beyond industry standards to provide you with carbon credits you can trust to deliver real environmental benefits and stand up to the highest levels of scrutiny.

To see more details about our diligence process, keep an eye out for our upcoming white paper.

When you choose CNaught, you're choosing verified quality and transparency in every tonne of carbon.

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CNaught’s 7-Step Due Diligence Process