Our latest report reveals how we are reaching peak “carbon neutrality” but the tide is turning on this disingenuous form of marketing and climate action will be better for it.
In a review of 15 products marketed as “carbon neutral” in Belgian supermarkets, Carbon Market Watch found that none of these claims were credible, and that all of them risk misleading consumers. While the underlying actions, both related to the actual products and related to the companies’ producing the goods, vary dramatically, they all had in common an excessive reliance on carbon offsets to achieve supposed carbon neutrality.
These offsets store carbon temporarily, lack robust quantification, and do not generally provide additional benefits to the climate. This makes it improbable that they can genuinely compensate for the climate impact generated by the manufacturing of the products. In fact, some of the companies that produce the assessed goods have by now stopped claiming that the goods are carbon neutral, and others have been found guilty of misleading consumers.
We produced this analysis on behalf of Belgium’s consumer watchdog Test-Aankoop/Test Achats, to help them map out these disingenuous practices. And, as the presence of products from multinationals in our report suggests, Belgium is not alone. Carbon neutrality claims have proliferated worldwide in many consumer-facing businesses over the past four years, and it has become difficult for consumers to go shopping without interacting with a plethora of products that make some form of carbon neutrality claim.
However, this might be about to change. Reports and studies are starting to pile up to highlight the deceptive or misleading nature of such gimmicky marketing language, including several we were involved in (such as The Corporate Climate Responsibility Monitor, Flights of Fancy, and others).
This is triggering an awakening among many stakeholders. Governments and regulators are taking action to regulate such claims, as the risk to consumers is becoming increasingly clear. For example, the EU is working on a revamp of its consumer protection legislation to adapt it to an era of increasing greenwashing risk.
Some trailblazing companies are growing sceptical of these claims and prefer to steer clear of communications that might land them in hot water. This is not least because an increasing number of them are being taken to court for misleading advertisements, and several have already been found to be breaching consumer protection rules because of their exaggerated green claims (see, for example, the cases against Sonett (cleaning products), Shell, KLM, Arla and TotalEnergies).
Finally, some climate consultancies and certifiers are themselves starting to feel the wind blowing in the other direction and abandoning their “carbon neutral” labels and certification in favour of less aggressive messages, such as “financing climate action”. See for example MyClimate or ClimatePartner, who have all replaced their “carbon neutrality” label with more nuanced messaging.
This is a welcome change. As we have written before, the promise of carbon neutrality is not only deceptive but also impossible to fulfil, and was built upon a model that focused primarily on creating cheap and attractive incentives for companies to invest in climate projects, often to the detriment of real climate action and at the expense of consumer rights.
Moving away from carbon neutrality claims will allow voluntary climate action to shift to new realms that better channel private climate finance to maximise its impact. While carbon credits might have a role to play in this, they are not the only option, and moving away from the logic of “compensation” will broaden the scope of what is considered to be a credible and verifiable impact. Avoiding misleading consumers and investors – not to mention policymakers who are constantly facing lobbying actions from companies that publicise their rosy climate goals – is only one step towards strengthening private sector climate action.
Initiatives – such as Milkywire – which aim to develop funds to help companies channel their money to the most impactful initiatives are a good idea. They will be particularly positive when integrated into broader company strategies to price their internal emissions and channel the associated finances to this type of fund.
But channelling money to external projects is not the only positive measure that companies can take. It might not even be the biggest. The best place for companies to start is to lobby their governments and regulators in favour of stricter climate targets and regulations in their sector. This is the most effective short-term action they can take because it will contribute to shifting an entire sector, and is very likely to end up generating more absolute reductions than any efforts to address the company’s own direct emissions. In addition, there is a business case for doing this. Companies which are already willing to reduce their climate impact and take voluntary actions are likely to have a better understanding of what this involves, compared to a competitor that has not been focusing on this dimension at all. Requiring an entire sector to take actions will hence put the progressive companies at an advantage, because they will have a headstart in tackling the challenge and will not be penalised for the extra costs and investments they incur.
Ultimately, tackling the climate crisis will require a multifaceted approach. Policymakers will need to step up and make the necessary political investments to transform our societies, companies will have to support progressive policies, address their own impact, and finance external action, and consumers, when better informed, will have to play their part too by transforming their behaviour. These actors must work together, and ensuring that they have access to transparent and unbiased information is an important place to start.