The Rating the Raters: Accountability and Transparency Standard report by Transparency International Malaysia, authored by Prof Dato’ Rajah Rasiah, Distinguished Professor of Economics and Executive Director of the Asia-Europe Institute, University of Malaya, and Dr. Puvanesvaran Sanjivee, Economist at the Asia-Europe Institute, University of Malaya, focuses on evaluating carbon credit rating agencies—the “gatekeepers” of Malaysia’s voluntary carbon market (VCM)—to determine whether they operate with integrity, transparency, and accountability. These agencies play a critical role in verifying the quality of carbon credits, yet scandals such as Verra’s 2023 integrity crisis exposed systemic flaws in verification and raised concerns about false claims of emissions reductions. Against the backdrop of Malaysia’s climate commitments under the Paris Agreement, including net‑zero emissions by 2050 and a 45% reduction in carbon intensity by 2030, the report stresses the urgent need to hold rating agencies to higher standards. By scrutinizing their methodologies, independence, and accountability, the project aims to ensure that carbon markets genuinely deliver on emissions reductions and avoid greenwashing practices by corporations such as Petronas and Shell.
Beyond Malaysia’s evolving regulatory framework—such as the Sarawak Environment Ordinance (2023), the Carbon Capture, Utilisation, and Storage Bill (2025), and the National Sustainability Reporting Framework (NSRF)—the real test lies in how carbon credit rating agencies themselves uphold transparency and integrity. These agencies are responsible for verifying the credibility of carbon credits, yet systemic issues such as weak Scope 3 emissions accounting, inadequate consideration of environmental impacts like rare earth mining, and insufficient oversight of EV waste management reveal gaps in their methodologies. Political and economic pressures, including vested interests in polluting industries and unclear carbon tax policies, further complicate the environment in which these agencies operate. By critically assessing certification bodies such as Verra and Gold Standard, the report underscores the need to “rate the raters” through unified regulations, independent verification, and accountability mechanisms. Its main objective is to ensure that rating agencies embody the same standards of integrity, equity, and transparency they demand from project developers, thereby strengthening Malaysia’s carbon market and aligning it with global climate commitments.
To Access the Reports:
English Version: Rating the Raters: Accountability & Transparency Standards
Bahasa Melayu Version: Menilai Pihak Penilai: Akauntabiliti dan Ketelusan Piawaian
