Valence Four

Ratings / Approach

How V4 ratings are calculated.

From the underlying methodology to the final letter grade, in five steps.

What we rate

V4 rates Indian-origin carbon credits and carbon projects on a single comparable AAA-to-D scale. We cover all six dominant Indian project types: forestry, renewable energy, cookstoves, biogas, agricultural soil carbon, and industrial carbon capture.

V4 produces two rating products. V4-CCR (Carbon Credit Rating) is vintage-specific: it rates a specific credit issuance from a specific year. V4-CPR (Carbon Project Rating) is project-level: it assesses the overall health of a project across six pillars, independent of any individual vintage.

The five steps of a V4 rating

  1. 01

    Ingest registry documents

    V4 ingests the project design document (PDD), monitoring reports, verification statements, and all supporting documents from the registry. We cross-reference these against the registry's public database to verify completeness.

  2. 02

    Run methodology compliance checks

    Each document is assessed against the applicable Verra VCS or Gold Standard methodology, including V4's India-specific extensions. We check whether the methodology was correctly applied, and whether the data inputs were appropriate.

  3. 03

    Run satellite and data integration

    For each project, V4 integrates ISRO Bhuvan land-cover data, FSI forest inventory, CEA grid emission factors, IMD weather data, Hansen Global Forest Change, and NASA FIRMS fire detection as applicable. Claims that are inconsistent with these sources generate findings.

  4. 04

    Conduct field verification

    V4 analysts conduct site visits for projects above our threshold size. Field verification includes Hindi-language or regional-language community interviews, physical inspection of project infrastructure, and GPS-verified sampling at project locations.

  5. 05

    Score, apply floor rule, assign rating

    Each project is scored across six pillars: additionality, permanence, leakage, monitoring, social safeguards, and environmental safeguards. The floor rule is applied (the final rating cannot exceed the weakest pillar by more than two grades). The final letter grade is assigned.

The two products: V4-CCR and V4-CPR

V4-CCR

Carbon Credit Rating

  • -Vintage-specific: rates a specific credit issuance
  • -AAA-to-D scale with adjustment factors
  • -Floor rule applied
  • -Best for procurement decisions
  • -Refreshed per vintage, and on material events
Read the V4-CCRpage →
V4-CPR

Carbon Project Rating

  • -Project-level: rates the overall project health
  • -Six pillar scores (0-100 each)
  • -Floor rule applied
  • -Best for pre-investment due diligence
  • -Refreshed annually, and on material events
Read the V4-CPRpage →

How the AAA-to-D scale works

Each grade reflects the overall integrity of the credit or project after all pillar scores, adjustment factors, and floor rules have been applied.

AAA
Highest integrityOutstanding additionality, permanence, and monitoring. No material findings. Suitable for the most demanding procurement standards.
AA
Very high integrityStrong across all six pillars. Minor findings that do not materially affect credit quality.
A
High integritySolid methodology compliance, good monitoring, limited leakage risk. A reliable choice for most buyers.
BBB
Good integrityWorkable across pillars with identifiable but manageable weaknesses. Appropriate with awareness of flagged issues.
BB
Moderate integrityMeaningful findings in one or more pillars. Buyers should understand specific risks before proceeding.
B
Low integritySignificant questions over additionality, permanence, or monitoring. Proceed with caution and documented rationale.
CCC
Very low integritySerious methodology failures or unresolved post-issuance findings. Not recommended for most purposes.
CC
Highly speculativeMultiple significant failures. Active investigation or cancellation risk.
C
Near defaultFundamental integrity failure. Registry-level action pending or underway.
D
Not credibleCredits have failed V4's minimum integrity threshold. V4 does not recommend procurement.

The floor rule

"The final rating cannot exceed the weakest pillar score by more than two grades."

A project that scores excellently across five pillars but has a severely compromised monitoring system cannot receive a grade higher than two grades above the monitoring score. The floor rule prevents the kind of grade inflation that occurs when strong environmental co-benefits are used to offset fundamental methodology failures.

Adjustment factors

Adjustment factors are applied to individual vintages where events after issuance have materially affected the integrity of the credits issued. They can only reduce the rating, never increase it.

  • -Vintage-specific reversals: detected post-issuance events that reduce or eliminate the claimed sequestration for a specific vintage year
  • -Post-issuance findings: registry investigations, journalist investigations, or independent research that identifies significant methodology failures
  • -Project changes: ownership transfers, land use changes, or community-level events that affect credit validity for a specific issuance

What V4 is not

  • -V4 is not a registry. We do not approve, register, or issue carbon credits.
  • -V4 is not a third-party verifier. We do not audit monitoring reports on behalf of registries.
  • -V4 is not a guarantee. A high V4 rating reflects our assessment of integrity based on available evidence. It is not a guarantee of performance.
  • -V4 ratings are not legal or financial advice. They are analytical assessments intended for sophisticated market participants conducting their own due diligence.

V4 ratings are produced by an entity that is structurally independent of any commercial carbon credit activity. Rated parties cannot commission or pay for ratings of their own credits.

Read the full methodology

Methodology hubSee coverage