Achieving Carbon Neutrality Takes More Than a Great Label and Good Intentions

“Without transparency and concrete commitments rooted in deep decarbonization, these labels are at best misleading.”
Despite these clear trends, there is a noticeable lack of federal legislation around how companies communicate their impact on the climate. It’s common today for brands to advertise their lack of carbon footprint. For some companies, it’s the centerpiece of their marketing strategy.  The notion of being “climate neutral” has been around since the birth of the carbon market in the late 1990s, which gave private and public organizations the ability to “offset” their emissions. The pioneers of climate neutral certification, British organizations like Natural Capital Partners and Carbon Trust, have facilitated the process for businesses to achieve climate neutrality since the early 2000s. Natural Capital Partners provides more than 30 types of certification for corporations, while Carbon Trust offers a multi-tier carbon footprint labeling system that allows products to advertise the organization’s signature footprint logo depending on their level of sustainability. A growing number of independent certification organizations like CarbonFund and Native Energy provide certification for both businesses and individuals, while some corporations, like consumer-products behemoth Unilever, are developing their own system of labeling for its products’ climate footprint even as they delay full neutrality until 2039. Similarly, Amazon is complicating the message by providing its own “Climate Pledge Friendly” label for products that commit to Amazon-approved third-party certifications.
Understanding these regulatory shortcomings requires wading into the weeds a bit, but it’s important for understand where these labels could do more. Most corporations will cite the Greenhouse Gas Protocol (GGP) as the resources for assessing one’s relative climate neutrality. The GGP lays out three scopes for measuring a corporation’s footprint: The first two scopes account for direct energy usage by a business, and the third accounts for the entire supply chain and often eclipses the other two scopes in greenhouse gas output. Yet, there is nothing stopping a corporation from offsetting one or two of these scopes and then advertising they’ve gone “neutral” or achieved “net-zero” emissions. Which is why more than a thousand organizations, including gigantic brands like AT&T and Verizon that pledge neutrality by 2035, can make these claims without having effectively accounted for all three factors of their business and supply chains.

Carbon Trust uses a footprint label to denote varying levels of carbon neutrality.

Unlike the carbon neutral certification, to claim the Climate Neutral label, brands must offset greenhouse gas emissions in both their direct business production and the supply chains they use. They also must create a strategy for reducing greenhouse gas emissions going forward. This helps to eliminate brands that are just trying to use partial or delayed neutrality as a greenwashing marketing tactic. Additionally, Climate Neutral has a specific set of standards for what qualifies as a legitimate carbon credit—projects can include tree planting, renewable energy in what the UN describes as “least-developed” countries, water filtration, agriculture, and “avoided” deforestation projects, where land owners are paid to not cut down forests. Still, to account for these credits, the certification relies on the system of third-party carbon credit verifiers like Verified Carbon Standard‍, Climate Action Reserve, Gold Standard, and Clean Development Mechanism.

While the business of carbon trading and offsetting is complicated, the Climate Neutral certification is trying to make the process more transparent for consumers and brands alike, while ultimately trying to elevate projects and products that are focused on mitigating the climate crisis. “All of it needs money today, yesterday, ten years ago,” says Todaro. “So what we’re doing when we offset is driving finance into solutions today that are taking carbon out of the atmosphere.” The official Climate Neutral certification has so far has created a network of 150 brands including Allbirds, Kickstarter, and Avocado, that abide by the more rigorous standard for neutrality, including putting a fraction of their annual revenue towards climate mitigation projects. When it comes to communication with customers, brands reaching for this higher bar will no doubt benefit. Another study conducted last year by the Carbon Trust found that across eight countries in Europe and the U.S., two-thirds of consumers are more likely to think positively of brands that show they’ve tried to lower their carbon footprint.

The cultural and commercial pressure for brands to go green is mounting, but even the most ardent supporters of the movement know it will take time to get labeling and certification right.Consolidated labeling with ever-growing standards for carbon neutrality is a hopeful—if gradual—enterprise when it comes to encouraging corporations to reduce greenhouse gas emissions. And consumers, who are increasingly conscious of greenhouse gas emissions impact, are making their concerns clear in the marketplace. The challenge is ensuring action drives marketing—not the other way around.  Otherwise, unregulated propagation of carbon neutral claims is just another opportunity for companies to distract increasingly climate-anxious consumers from the need for actual decarbonization that is necessary. Greenwashing through certifications and labeling is a recursive phenomenon in the United States, but with the immediacy of the climate crisis, time has run out for brands to sit around thinking about new ways to show they care while delaying action for another one, two, or three decades in a deeply uncertain future.

Apparel brand H&M promises varying amounts of reduction and offsetting on all three scopes by 2030, but only promises to be  “climate positive” by 2040. While massive greenhouse gas contributors like Ford and BP discuss the three scopes in their 2050 pledges, they fail to actually specify how they’ll address them. All this without mentioning the fact that speculative pledges are just that—speculative— which gives brands the ability to market their commitment without an immediate action. “Without transparency and concrete commitments rooted in deep decarbonization, these labels are at best misleading,” says Dr. Amy Moas, Senior Climate Campaigner at Greenpeace USA. “At worst, they can be blatant lies that risk distracting and delaying the vital work of addressing catastrophic climate change.”
In recent years, brands have become one of the key ways people learn about carbon and greenhouse gas emissions. Climate friendly branding has taken on the role of educator through the introduction of a new lexicon around sustainability efforts.  As sordid as it might seem, it’s an unavoidable reality of American consumer culture. According to a 2019 study from NYU Stern Center for Sustainable Business, people are noticing climate-friendly branding, and buying products because of it. Products marketed as sustainable are growing five times faster than conventionally marketed goods. “Today’s younger consumer is more environmentally conscious than those in previous generations,” says Randi Kronthal-Sacco, Senior Scholar of Marketing at the NYU Stern Center for Sustainable Business and author of the report. “So to do well in the future, brands must do good—Consumers will demand it. Those that don’t will be left behind.”
“To do well in the future, brands must do good—Consumers will demand it. Those that don’t will be left behind.” These emerging claims of climate neutrality, net-zero, carbon zero, climate positive, carbon negative, and all of the other variations on a company’s advertised relationship to greenhouse gases creates a complicated new lexicon for people who are already busy trying to decipher their own complicated role on this warming planet. “We’re so far off from a federal standard for climate claims. There are no rules,” says Isabella Todaro, certification manager at Climate Neutral, a non-profit that since 2018 has worked with brands to reduce their overall greenhouse gas emissions and provide climate neutral certification. “Everyday—I have Google alerts turned on, so I know—brands are announcing, just, absolutely nonsense climate neutrality commitments.” Like most green marketing communication, the only regulation around what brands can advertise regarding environmental claims comes from the Federal Trade Commission’s Green Guides, which are not legally enforced regulations and were only most recently updated nearly a decade ago, making them largely toothless when it comes to accounting for carbon claims. As a result, in the United States there is little stopping brands from announcing their neutrality without the data to back it up.
If you’ve been worried about your carbon footprint, you can now rest easy—an extensive and growing list of companies, cities, states, nations, and continents have declared they have it under control. Companies like Shell, Dunkin’, United Airlines,  H&M, Taco Bell, GM, Nestle, Monsanto, and plenty of other recognizable brands, have been trotting out plans to go “net zero” and neutralize their carbon footprint as a way to assuage their customers’ anxiety around a worsening climate crisis. But while these pledges are at least a first step in the right direction, they’re often couched in marketing speak that appears most concerned with convincing people they’re at least doing something to negate their longstanding history as unscrupulous greenhouse gas emitters.

The average person can find these marketing plans to be nearly impossible to decipher, making neutrality claims about as reliable as recyclability claims. However when it comes to sustainable packaging labels, consumers are growing more discerning. The growing demand for clarity in sustainable packaging led the non-profit Climate Neutral to create a more rigorous and transparent system through which brands must achieve certification if they want to advertise the official “Climate Neutral Certified” label. “Our reason for existing is to drive demand for corporate climate action through this mechanism of a label,” says Todaro. By creating a higher standard and a visible mark, they hope to “build a critical mass of companies who are doing this, so that it becomes the cost of doing business. You can’t compete if all of your competitors have this mark and you don’t.”

Savvy brands know this, which is why there’s been an uptick in companies looking for ways to show they care about the planet. Jaclyn McCarthy, communications manager at 1% For the Planet, a non-profit that partners with brands to help them put a fraction of annual revenue towards environmental projects, says she’s seen a huge increase in awareness from companies, who understand sustainability is a massive marketing opportunity.  “In 2020, we experienced record growth; our brand awareness increased 26 percent and more than 1,300 business members and 400 individual members joined our global network,” she says.

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