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Meanwhile, institutional investors such as the Net Zero Asset Owner Alliance or Climate Action 100+ have a different trust issue. They are used to more in-depth analysis and independent verification of companies' claims, and carbon neutral certifications do not have the same level of detail as other financial ratings they are accustomed to. For example, when investing in bonds, it's not enough that one rating agency, such as Standard & Poors or Moody's, considers a bond "investment grade." They typically require credit ratings by more than one rating agency, and the ratings are in tiers from AAA (highest credit quality) to CCC (high default risk.) As climate neutrality becomes important to them, they would probably demand the same level of detail in ratings of corporate climate action.
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