Score Overview
Verdex calculates a project's transition loan eligibility using two independent scores: LMA Transition Score (compliance with LMA 5 Core Components minus greenwashing penalties) and DNSH Score (EU Taxonomy environmental harm screening).
Two Independent Scores
LMA Base − Greenwashing PenaltyEU Taxonomy Article 17LMA Component Scoring
Projects are scored against the 5 Core Components from the LMA Transition Loan Guide (October 2025):
| Component | Max Score | Sub-Criteria | Weight Distribution |
|---|---|---|---|
| 1. Transition Strategy | 20 | 3 criteria | Published plan (8) + Paris aligned (7) + Entity-wide (5) |
| 2. Use of Proceeds | 20 | 3 criteria | Eligible activities (10) + Quantifiable (5) + No lock-in (5) |
| 3. Project Selection | 20 | 3 criteria | Strategy aligned (10) + Evaluation (5) + Sector fit (5) |
| 4. Management of Proceeds | 20 | 2 criteria | Allocation tracking (10) + Documentation (10) |
| 5. Reporting | 20 | 3 criteria | KPI framework (8) + Disclosure (7) + Verification (5) |
Component 1: Transition Strategy (20 pts)
const transitionStrategyScoring = {
// Does the entity have a published transition plan?
hasPublishedPlan: {
maxPoints: 8,
criteria: [
{ condition: 'Publicly disclosed plan', points: 8 },
{ condition: 'Internal plan only', points: 4 },
{ condition: 'No documented plan', points: 0 }
]
},
// Is the plan aligned with Paris Agreement?
parisAlignment: {
maxPoints: 7,
criteria: [
{ condition: '1.5°C aligned with SBTi', points: 7 },
{ condition: 'Well-below 2°C', points: 5 },
{ condition: 'NDC aligned only', points: 3 },
{ condition: 'No alignment stated', points: 0 }
]
},
// Does it cover the entire entity?
entityWideScope: {
maxPoints: 5,
criteria: [
{ condition: 'Entity-wide scope', points: 5 },
{ condition: 'Division/project only', points: 2 },
{ condition: 'Unclear scope', points: 0 }
]
}
};Greenwashing Penalty Calculation
The greenwashing penalty reduces the LMA score based on detected red flags. When AI evaluation is enabled, it uses a weighted combination of two methods:
Red Flag Severity Weights
| Severity | Point Deduction | Example Red Flags |
|---|---|---|
| HIGH | 25 points each | Missing baseline emissions, fossil fuel lock-in, no published plan |
| MEDIUM | 15 points each | No verification, vague timeline, missing financials |
| LOW | 5 points each | Missing Scope 3, generic language, unclear governance |
// Greenwashing penalty calculation (DNSH is separate)
// Rule-based risk score → Penalty mapping
function calculatePenaltyFromRiskScore(riskScore: number): number {
if (riskScore >= 70) return 20; // High risk
if (riskScore >= 40) return 10; // Medium risk
if (riskScore >= 20) return 5; // Low-medium risk
return 0; // Low risk
}
// Final LMA Score = LMA Base Score - Greenwashing Penalty
// DNSH Score is displayed separately (not subtracted from LMA)
function calculateFinalLMAScore(
lmaBaseScore: number, // 0-100 from 5 components
greenwashingPenalty: number // 0-60 from red flags
): number {
return Math.max(0, lmaBaseScore - greenwashingPenalty);
}DNSH Score (Independent)
The DNSH (Do No Significant Harm) assessment is an independent score displayed alongside the LMA Transition Score. It evaluates EU Taxonomy Article 17 compliance across 6 environmental objectives.
DNSH Score Interpretation
Final Score Calculation
interface AssessmentScores {
// LMA Component Scores (0-20 each, 0-100 total)
lmaBaseScore: number;
components: {
transitionStrategy: number; // 0-20
useOfProceeds: number; // 0-20
projectSelection: number; // 0-20
managementOfProceeds: number; // 0-20
reporting: number; // 0-20
};
// Greenwashing Assessment
greenwashingPenalty: number; // 0-60 points deducted
greenwashingRisk: 'low' | 'medium' | 'high';
// DNSH Assessment
dnshScore: number; // 0-100
dnshStatus: 'compliant' | 'partial' | 'non_compliant';
// Final Score
overallScore: number; // lmaBaseScore - greenwashingPenalty
eligibilityStatus: 'eligible' | 'partial' | 'ineligible';
}
function calculateFinalScore(
lmaBaseScore: number,
greenwashingPenalty: number,
greenwashingRisk: 'low' | 'medium' | 'high'
): { overallScore: number; eligibilityStatus: string } {
const overallScore = Math.max(0, lmaBaseScore - greenwashingPenalty);
let eligibilityStatus: string;
// High greenwashing risk with score >=80 = automatic ineligible
if (greenwashingRisk === 'high' && overallScore < 80) {
eligibilityStatus = 'ineligible';
} else if (overallScore >= 60 && greenwashingRisk !== 'high') {
eligibilityStatus = 'eligible';
} else if (overallScore >= 30) {
eligibilityStatus = 'partial';
} else {
eligibilityStatus = 'ineligible';
}
return { overallScore, eligibilityStatus };
}Eligibility Thresholds
- • Fossil fuel extraction or production projects
- • Coal-related activities
- • Projects in non-African countries (outside supported 7)
- • Projects with fundamental DNSH incompatibility
Scoring Examples
Example 1: Strong Solar Project
- Transition Strategy: 18/20
- Use of Proceeds: 17/20
- Project Selection: 16/20
- Management: 15/20
- Reporting: 14/20
- LMA Base: 80/100
- Penalty: -5 pts
- LMA Score: 75/100
- Status: ELIGIBLE
- Score: 85/100
- Status: Compliant
Example 2: Project with Mixed Results
- Transition Strategy: 20/20
- Use of Proceeds: 20/20
- Project Selection: 20/20
- Management: 20/20
- Reporting: 20/20
- LMA Base: 100/100
- Penalty: 0 pts
- LMA Score: 100/100
- Status: ELIGIBLE
- Score: 61/100
- Status: Partial
- Environmental concerns need addressing
- • +8 pts: Publish a transition strategy document
- • +7 pts: Align with Paris Agreement 1.5°C pathway
- • +5 pts: Commit to third-party verification
- • -10 pts avoided: Include baseline emissions data