CLEW / Finley Smee, CC BY 4.0
Dossier
23 Dec 2022, 11:30
Company climate claims

CLEW focus: 'Climate neutral' products and companies - Greenwashing or sign of serious action?

Companies across the globe have started a race to declare themselves and their products "climate neutral". Hardly a day passes without a firm announcing a net-zero target, or launching a product that is supposedly "climate neutral." Most claims still rely on questionable commitments to compensate continued emissions elsewhere on the planet, inviting accusations that this trend is nothing but greenwashing. But the decarbonisation drive of entire economies will inevitably result in firms no longer having any impact on the climate. Truly climate-neutral products will give individual consumers the power to speed up emission cuts. CLEW will zoom in on the current flurry of company climate claims in a series of articles, interviews, factsheets, a webinar, and international collaborations. This dossier provides an overview of project content and highlights our plans for future publications [UPDATE - Adds series of international case studies on the impact of net zero targets, updates timeline].

*** Please note: This dossier is one part of the CLEW focus on company climate claims. Other journalists can also get involved - Find out more here. Our upcoming events and opportunities are here. This blog explains why we decided to launch the project. ***

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Corporate net zero commitments send ripple effects across the globe

The spread of corporate net zero targets is starting to make itself felt across the world – not only among businesses, but also far beyond. An increasing number of companies have started to scan - and then reduce - the climate impact of their international supply chains, sending ripple effects across continents. Clean Energy Wire presents a series of international case studies on the far-reaching impact of net zero targets, which will continue in the coming weeks. Find the collection here.

Regulation must enable markets for climate neutral products – German certifier TÜV Süd

Markets are usually good at establishing standards and compliance themselves to facilitate business, but climate neutral products and emission reductions appear to be an exception to this rule, says Georgios Agrafitiotis, auditor for carbon management at German technical inspection provider TÜV Süd. The interest by companies to have their products certified for climate credentials has grown rapidly in the past years, mostly thanks to regulation compelling them to step up their emissions reduction efforts, he argues. In this interview, Agrafitios explains to Clean Energy Wire why climate certification often is "detective work" that can produce very accurate results, how companies mutually push themselves to deliver cleaner products and why Germany's technical inspectors follow a British guideline to carry out their tasks. Read the interview here.

Truly climate-neutral products still only possible in theory - German env agency

It remains virtually impossible to make truly "climate neutral" products in a modern economy, despite the rapid increase of such labels, says Susanne Spies of Germany's Federal Environment Agency (UBA). Entirely eliminating the climate impact of products and services still poses huge challenges, the researcher for ecologic design and environmental labeling told Clean Energy Wire in this interview. She explains why clear definitions are urgently needed to make neutrality claims effective, where states and companies differ when counting emissions, and why even growing your own vegetables is not necessarily climate neutral.

CLEW guide: How to unpick a company net zero target in 7 steps

More and more companies are racing to outdo each other with green pledges to strike net zero emissions. But what's behind these bids to wipe out their contribution to climate change? Journalists and consumers alike are often out of their depth when it comes to distinguishing ambition from greenwashing. Evaluating net zero targets is a complicated business, with pitfalls galore. Based on the methodology of the renowned NewClimate Institute, Clean Energy Wire has produced a step-by-step guide to get to the bottom of corporate climate claims - find it here.

Analysis: Climate pledges put companies in crosshairs of consumer litigation

Boasting about “climate neutral” products or vague plans to become “net zero” is turning into a legal risk for companies, as activists drag firms into courts over deceiving consumers with questionable climate pledges. A raft of landmark climate “greenwashing” cases based on consumer law are about to be heard by judges in several countries. While activists hope that courts will take a hard line on companies, others warn that the cases could backfire, and even delay company climate action. The immediate impact of the rulings might not equal famous climate cases against governments based on human rights, but they are set to shape the future of company climate communication, and the role consumers play in the fight against climate change, experts say. Read the article here.

News: “Climate neutral” product labels mislead vast majority of consumers – survey

Products advertised as “climate neutral” mislead consumers because the vast majority of people don’t have a clear idea what the claim means, according to a survey by a German consumer advice centre. “Only 3 out of 100 respondents know in detail what is behind the label ‘climate neutral’,” said North Rhine-Westphalia’s consumer protection centre. Even particularly environmentally conscious consumers are unaware of the label’s full meaning, the survey revealed. “The misconception that the manufacturing companies are committed to reducing CO2 emissions is even more prevalent among this group than on average,” said the centre’s Wolfgang Schuldzinski. “Thus, such labels mislead consumers. We need reliable labels that meet people's expectations and leave no room for greenwashing." Read the full article here.

Interview: Adverts with unregulated climate claims are barrier to real emission cuts – NGO lawyer

The spread of unregulated company publicity involving “net zero” or “climate neutral” claims has become a systemic barrier to achieving climate targets, argues ClientEarth, an NGO focussing on using laws to advance environmental protection. “Advertising has developed into this big inhibitor of actual climate action,” says their lawyer Jonathan White, a specialist in climate accountability. In this interview with Clean Energy Wire, White explains the prospects for using consumer law as a way of tackling companies on their climate claims, how the EU will fight greenwashing in its pending update of consumer protection laws, and why ClientEarth is calling for an outright ban on advertising by fossil fuel companies.

Factsheet: Company climate claims in court - Pending cases will shape future of 'net zero' pledges

Corporate climate pledges are increasingly challenged in the courts. Activists and other claimants are currently suing many firms over greenwashing, arguing they mislead consumers or investors - either by advertising vague plans to become "net zero," or by labelling products and services as "climate neutral" that rely on questionable commitments to offset continued emissions. The pending rulings are expected to have a major impact on companies' future use of climate claims in advertising and other communications. This factsheet lists landmark cases that are currently in the courts, both in Europe and beyond, as well as important decisions by advertising regulators.

Factsheet: Devil in the detail - The basics of company climate claims

Having a "net zero" target or launching a "climate neutral" product is the new normal for companies. But these claims are difficult to verify, and mostly don't add up when checked carefully. In the worst cases, they are pure greenwashing – misleading consumers and investors by hiding continued emissions. Evaluating corporate climate claims requires venturing into complex greenhouse gas accounting, and cutting through confusing jargon. This factsheet explains the basics for making sense of different types of climate pledges, deciding which emissions count, and the trouble with making climate sins disappear by paying others to do the emission cuts via carbon offsets.

Interview: 'Climate neutral' products are counterproductive greenwashing bluff - NGO

Products labelled as “climate neutral” deceive consumers and undermine progress in reducing emissions, argues Environmental Action Germany, an NGO specialising in fighting environmental cases in court. “They are totally counterproductive because they turn real competition in the field of environmental action into pure bluff,” says its executive director, Jürgen Resch. In this interview with Clean Energy Wire, Resch argues that corporate “climate neutral” claims delay effective climate action, because they falsely suggest environmental improvements. He says regulators are unlikely to end this trend that is “spreading like a pandemic,” which is why his organisation is suing companies over their climate claims.

Interview: Climate claims show that companies realise they must act on emissions - consultant

Current "climate neutral" product claims may be flawed, but they are a clear sign that companies realise that consumers want climate action, argues Jens Burchardt, the Boston Consulting Group's global expert on climate impact. "I think most companies have still not understood that this is an enormous opportunity," he explains in this interview. Pioneering companies still have the chance to present the world's first genuinely climate neutral products - based on emission cuts throughout supply chains instead of questionable carbon offsets. The first of these are likely to appear in the second half of this decade, but stringent regulation on "climate neutral" claims will be necessary to protect the frontrunners, says Burchardt, who has advised many companies on their net-zero efforts.

Image shows fruits with "climate neutral" labels. Photo: CLEW / Finley Smee
Photo: CLEW / Finley Smee, CC BY 4.0

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The CLEW focus project on company climate claims will run over several months. Below are our plans for future content. Are we missing a crucial aspect? We also welcome other suggestions for research to focus@cleanenergywire.org.

When can we finally buy truly climate neutral products?

"Climate neutral" products are popping up on our supermarket shelves on a daily basis. They rely on questionable promises of offsetting continued emissions elsewhere on the planet. But the shift of entire economies towards climate neutrality and deep industry decarbonisation put truly climate neutral products on the horizon. Our correspondent Sören Amelang will find out when we can finally buy that climate neutral pair of trainers. [Publication planned for January]

Corporate climate claims – Harmful greenwashing or sign of serious action?

Company “climate neutral” claims have become ubiquitous but remain highly controversial. Some activists decry deceptive greenwashing that prevents real emission cuts, while others welcome the commitments as a first step towards corporate climate neutrality. Sören will explore whether corporate climate commitments are an effective tool in the fight against climate change – and, if not, what needs to happen to make them a binding commitment. [Publication planned for January]

Sören's research will incorporate think tanks, activists, and businesses. For suggestions, questions, or tips, he can be reached at soeren.amelang@cleanenergywire.org.

What are 'climate neutral' products, and how can financial markets help to make them the norm?

Many companies claim to offer "climate neutral" products, but there is not yet a clear definition of what this actually means. Before they reach the customer, most products pass through a complex chain of steps – from resource supply to transport, production and retailing – all of which will have to be decarbonised eventually. Most of today's "climate neutral" labels are voluntary industry initiatives, as lawmakers have not yet sufficiently tightened the rules on defining and documenting climate neutrality efforts to guarantee effectiveness.

But according to our correspondent Benjamin Wehrmann, the quest for truly climate neutral products could receive a boost from an unusual ally – the financial sector. Refining the rules for sustainable finance, including tighter regulations on the climate impact of investments, could compel companies to fully disclose their emissions reduction progress. 

Benjamin plans to speak with environmental regulators and consumer protection groups about the value of existing "climate neutral" labels and what could be done to improve them. He will also reach out to financial market experts and the banking industry to sound out their expectations for disclosure rules in company reports, and the real-world implications this could have on greenhouse gas emissions. Benjamin welcomes suggestions on the role of finance in company climate plans via benjamin.wehrmann@cleanenergywire.org. [First publication planned for November]

What are the EU's plans for regulating company climate claims?

Covering company climate claims is by definition international, given the complex web of global supply chains. Our correspondent Julian Wettengel will focus his research on the European angle, and especially on regulation. As part of the European Green Deal – the EU’s green growth strategy – the European Commission has promised to step up its regulatory efforts to tackle false green claims. “Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment,” it has said. How far has the EU come in its bid to create a legal framework? Is there any existing national legislation in countries across Europe already in place? Are there any labels out there in Europe which truly guarantee climate neutrality?

Julian will talk to experts on EU regulation on green claims, such as representatives of the Commission, NGOs and business associations at the EU level, but also peek into a handful of countries for national examples – please send suggestions to julian.wettengel@cleanenergywire.org. [Publication planned for January]

All texts created by the Clean Energy Wire are available under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)” . They can be copied, shared and made publicly accessible by users so long as they give appropriate credit, provide a link to the license, and indicate if changes were made.

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