“ECOT” Carbon Emission Performance-Based Credit Rating System Research

This work presents an enhanced credit rating framework to comprehensively rate an enterprise by combining business credit with its carbon emission performance. It is significant to decision-makers in governments, enterprises, and financial institutions. This framework starts from the business credit of the corporation. Then, it considers three additional cores: carbon intensity, low-carbon operations, and technology human resources invested in low-carbon transformation. The framework methodology constructs two-level key indicators of each core. For the sublevel indicators, the rating framework conducts the following steps: consistency processing, dimensionality unification, outlier removal, and value assignment. Finally, the rating of each core is combined using weights calculated by Analytic Hierarchy Process (AHP) or provided via expert judgment. Using the dataset from two test companies, we show that this framework can successfully merge the carbon performance information into the basic corporate credit system and reflect the comprehensive credit change caused by the differences in carbon emission performance.