C100 Methodology v0.1 — Scoring the Carbon Stack
How the eight CIP dimensions combine into a single integrity-weighted score, and why carbon-side and market-side firms are treated symmetrically.
Abstract
C100 v0.1 is the first public release of the Carbon Index Protocol's integrity-weighted carbon equity index. This primer explains how 100 constituents are selected and weighted across eight scoring dimensions — Carbon Activity, Quality, ESG, Transition, Financial Strength, Sentiment, Innovation, and Producer/Consumer role — and how those dimensions are blended into a single CIP score on a 0-100 scale.
Key Findings
- 01The C100 weights companies by an integrity-adjusted score, not by market cap alone — preventing the largest emitters from dominating the index.
- 02Carbon-side (producers, infrastructure) and market-side (buyers, retirers) firms are scored on the same eight dimensions, normalized per cohort.
- 03Quality and Transition sub-scores together carry ~40% of the composite, structurally penalizing carbon theater and stranded-asset risk.
- 04Sentiment is bounded to ±20 score points and decays over 60 days, preventing news-cycle whiplash from distorting weights.
1. Why a new index?
Existing climate indices typically screen on emissions intensity, then weight by free-float market cap. That approach over-rewards mega-caps that have the disclosure budget to look clean, and under-rewards smaller carbon-side firms (project developers, MRV providers, registries) that actually move tonnes.
C100 inverts the lens. We start from the carbon stack itself — who is producing, verifying, retiring, or financing tonnes — and weight constituents by an integrity-adjusted score. Market cap is one input among eight, not the spine.
2. The eight CIP dimensions
Every constituent is scored 0-100 on eight dimensions. Each dimension is computed from public filings, registry data, and structured news ingestion, then z-scored against its peer cohort (producer vs. consumer vs. infrastructure).
- Carbon Activity — tonnes produced, retired, financed, or insured in the last 12 months.
- Quality — additionality, permanence, leakage, and MRV rigor of the underlying credits.
- ESG — governance, social license, and environmental management beyond carbon.
- Transition — capex alignment with a 1.5°C pathway; stranded-asset exposure.
- Financial Strength — balance sheet, free cash flow, and refinancing risk.
- Sentiment — 60-day rolling NLP signal across filings, NGO reports, and litigation.
- Innovation — patents, R&D intensity, and pilots in removal / DAC / MRV.
- Producer/Consumer Role — structural position in the carbon supply chain.
3. From dimensions to a single score
The composite CIP score is a weighted average of the eight dimensions. Weights are fixed by the methodology committee and reviewed quarterly. The current v0.1 weights bias toward Quality (22%) and Transition (18%) — the two dimensions most predictive of forward credit-integrity outcomes in our backtests.
Sentiment is intentionally capped at ±20 raw points before blending, so a single news cycle cannot move a constituent more than ~4 points on the composite. This is a deliberate guardrail against reflexivity.
4. Index weighting and rebalance
Constituent weights are proportional to the CIP score raised to the power 1.3, then capped at 4% per name and 25% per sector. The exponent rewards integrity leaders without producing a winner-take-all distribution.
The index is rebalanced quarterly (Q1/Q2/Q3/Q4) with a two-week consultation window. Ad-hoc rebalances are triggered only by corporate actions (M&A, delisting) or by a Greenwash Risk upgrade to High.
C100 v0.1 dimension weights
| Dimension | Weight | Refresh |
|---|---|---|
| Quality | 22% | Quarterly |
| Transition | 18% | Quarterly |
| Carbon Activity | 14% | Monthly |
| ESG | 12% | Quarterly |
| Financial Strength | 10% | Quarterly |
| Innovation | 10% | Quarterly |
| Sentiment | 8% | Daily (60d window) |
| Producer/Consumer Role | 6% | Quarterly |
Implications
- →Allocators using C100 as a benchmark should expect tracking error vs. MSCI ACWI of ~6-9% annualized, driven primarily by the carbon-side overweight.
- →Single-name moves of >2% in a quarter are usually score-driven, not price-driven; check the dimension breakdown before reacting.
- →The methodology is open-source and versioned — any change to weights or formulas ships with a new vX.Y tag and a changelog.
Methodology
- • Universe: ~3,200 listed companies with material carbon exposure, screened from MSCI ACWI plus a curated long-tail of carbon-pure-plays.
- • Data sources: SEC EDGAR, EFRAG, ISSB filings; Verra, Gold Standard, ACR, ART, CAR, Puro, Isometric registries; Finnhub pricing.
- • Scoring engine: per-cohort z-scores, winsorized at the 1st/99th percentile, blended via fixed weights.
- • Backtest window: 2019-01-01 to 2025-12-31, monthly rebalancing simulated with 5bps transaction cost.
Sources & References
This research note is published by the Carbon Index Protocol research desk for informational purposes only. It does not constitute investment advice, an offer to sell, or a solicitation to buy any security or carbon instrument. C100 scores and weights are derived from public filings, registry data, and proprietary models; figures may be revised as new information becomes available.