Carbon credit rating firms seek to help companies have a better sense of carbon offset credits, from which many have turned their backs on due to the reputational risk of greenwashing. The notion of greenwashing refers to projects that do not follow standards and have inaccurate measurements. It weakens the confidence of carbon credit buyers, especially businesses wanting to decarbonize their operations. Corporations, online carbon marketplaces, and traders are the common clients of carbon credit ratings. Carbon credit rating agencies grade projects by considering social and economic data, academic research, and satellite imagery. They flag risks using various criteria. For instance, if a project issues too many credits or it is financially reliant on income from carbon credits.

Source: carboncredits