A key benefit of corporate sustainability initiatives and climate commitments is the commercial value that they drive.
Consumers, investors, and employees are all now making sustainability a top priority – so companies that can communicate their climate credentials effectively have an opportunity to drive business growth, attract the best talent onto their team, and win new investment.
Today, many companies communicate their climate impact and commitments using recognised green environmental claims in their marketing messaging, on packaging etc.
Different green claims – carbon neutral, net zero, climate positive and so on – have different meanings and require different approaches to business sustainability to fulfil.
To make a credible green claim – and prepare for incoming new legislation such as the EU Green Claims Directive – it’s important for your company to understand the meaning of different types of green claims and how to target them.
In this post we’ll take a closer look at:
A green claim – sometimes also called an environmental claim or climate claim – refers to any sustainability credential that is used to describe a product, service, or brand.
Green claims often relate to climate targets or commitments made by companies, so a company may describe themselves as ‘climate positive’ or ‘committed to net zero by 2030’ – such as Vestre, which is already a ‘climate neutral outdoor furniture manufacturer’ and is working towards a ‘net zero’ target.
Or, green claims might relate to the environmental credentials of specific products, materials, or packaging. So, for instance, a clothing brand might explain that their new line is ‘made from 60% recycled plastic’ or is ‘carbon neutral’ as a product.
A real-life example of this is the M0.0NSHOT trainer by Allbirds: ‘the world’s first net zero carbon shoe’:
As you can tell from these examples, green claims can be an incredibly strong and powerful message for a company or product.
Unfortunately today there are also many examples of companies using green claims like these in greenwashing – claiming that their company or product is ‘carbon neutral’ or ‘net zero’ without the evidence to back this up. We’ve seen high-profile brands like H&M, Unilever, and Lufthansa Airlines hitting the headlines because of this, with their adverts ending up banned due to misleading environmental claims.
So, the message here is two-fold:
The first step is understanding – so let’s take a look at the meanings of the most common green claims at a company level and break down why you might want to target one over another.
Some green claims are fairly easy to grasp.
Take ‘100% recycled’ for instance. For a company to make this claim to describe the packaging of their product, the packaging needs to be – yep, you guessed it – made from 100% recycled material. And substantiating that claim means providing evidence from the company’s production process of the material sourced or produced for that packaging.
Other green claims are a bit more confusing.
Terms like ‘carbon neutral’ ‘carbon negative’ ‘climate positive’ ‘net zero’ all sound similar, but have specific meanings in terms of corporate climate targets – and actually, the role of carbon offsetting has a lot to do with it.
So, let’s take a look at the meaning of these four green claims – net zero, carbon neutral, carbon negative, and climate positive.
A state of net zero emissions is reached when:
If the company managed to completely eliminate their carbon emissions, they would then be ‘zero carbon’ – but this is virtually impossible.
So, for a company to claim to be net zero they must be able to prove that they have cut their emissions as much as possible – often in line with a respected framework such as the Science Based Targets Initiative (SBTi) Net-zero Standard – and that any residual emissions have been balanced by buying an equivalent amount of carbon credits from permanent carbon removal projects e.g. direct air capture or enhanced weathering.
Achieving net zero carbon emissions isn’t an easy task and won’t happen overnight, but it is a great indicator of real commitment to addressing a company’s environmental impact.
Many companies have made targets and plans to reach net zero by 2050 – in which case their green claim would be ‘working towards net zero’ or similar.
Carbon neutral indicates a state of zero emissions.
It’s similar to net zero, but differs in two important ways:
It’s a less rigorous target than net zero for a company to make, but often it’s a useful first step in a sustainability strategy or climate commitment.
For instance, if you’ve just calculated your company’s carbon footprint for the last financial year you could offset those emissions instantly though buying carbon credits – taking immediate action to address your environmental impact whilst determining what needs to be done to reduce those emissions (which can take a while to put into action).
At this point, you can credibly claim to be a carbon neutral company – whilst you continue working towards reducing emissions or an eventual net zero target.
Carbon negative – also known as net negative – indicates that the company results in less than zero carbon emissions being emitted. This means, in practice, that the company is removing more carbon from the atmosphere than it produces.
It’s essentially a step beyond net zero – once a company has achieved net zero emissions, they can continue to increase their climate impact by buying carbon removals above and beyond what is needed to address their residual emissions.
So, if a company reduced emissions as much as possible and then calculated that their residual emissions were 2,000 tCO2 per year, they could choose to buy 5,000 tCO2 of carbon removals per year and then they could credibly claim to be carbon negative or net negative.
This is a great target to continue progress once you’ve achieved net zero as a company – ensuring companies do not stop once they reach a set target, but instead continue to increase investment in climate solutions.
Climate positive is exactly the same as carbon negative – the company goes beyond net zero to remove additional carbon emissions from the atmosphere.
It’s just a different framing, so instead of saying that the company's activities resulting in ‘net negative’ emissions being released into the atmosphere, the company is having an overall positive impact for the environment.
In all of these green claims carbon offsetting and removals play a big part.
For the green claim to be credible, the carbon credits bought towards that claim must be credible themselves – additional, durable, single-counted, providing co-benefits.
Otherwise, you’re compensating for your company emissions with carbon credits that don’t actually make the real-world carbon benefit that they claim to, and your claim isn’t valid.
So, to make any of these green claims you need to be able to disclose the amount of carbon offsets or removals that you’re using towards the claim being made, and provide evidence that the carbon credits are from high-quality, credible carbon projects.
Incoming legislation reflects this.
For instance, the EU Green Claims Directive proposal highlights the need to disclose and substantiate the use of carbon offsetting towards claims:
Communicating your offsetting in this way not only prepares you for legislation like this, but also clearly sets you apart from the many companies out there that are relying on dodgy offsetting for their environmental credentials.
As you can see, there’s a fair amount of nuance in the different climate targets and commitments a company can make – and the resulting emissions reductions and carbon offsetting/removal which needs to happen.
Green claims can be powerful frameworks for companies to align their sustainability work with. But, they can also be distracting, leading you to focus on targets, processes, and messages rather than on maximising your company’s positive impact.
So, here’s a couple of alternative approaches to consider:
Unsure which green claim or approach makes most sense for your company? Want to learn more about credible carbon offsetting? We’re always happy to chat through the options – get in touch.