- The nonprofit Climate Neutral has created a label that certifies that a company is offsetting and reducing its greenhouse gas emissions.
- While other labels currently exist, such as Carbon Neutral, Climate Neutral’s certificate includes emissions other labels don’t track.
- The name of the nonprofit is a play on the phrase “carbon neutral,” which means a company has “net zero emissions,” or that the CO2 the company is producing is no greater than the amount of CO2 it’s re-absorbing from the atmosphere through offsets.
- Business Insider talked with Climate Neutral CEO Austin Whitman to learn about how the nonprofit operates and the state of the climate movement in corporate America.
- This article is part of Business Insider’s Better Capitalism series, which tracks the ways companies and individuals are rethinking the economy and role of business in society.
- Visit Business Insider’s homepage for more stories.
At the grocery store, you’ve probably seen products with labels like “USDA Organic” and “Fair Trade Certified.” They mean, respectively, that the product meets some regulatory standards that ensure products are organic, or fair trade (broadly defined as paying one’s producers fairly).
The team behind a nonprofit called Climate Neutral, established in 2018, wants to become the greenhouse gas emissions equivalent of those recognized labels. They’ve created a label called “Climate Neutral Certified,” where consumers know they are buying from a company that is actively measuring, reducing, and offsetting its carbon footprint.
Currently, there are similar certifications out there, such as the Carbon Reduction Label and the Carbon Neutral label, but Climate Neutral thinks those labels don’t go far enough. Climate Neutral requires nonprofits to offset all three scopes, or types, of emissions laid out by the Greenhouse Gas Protocol, the most widely used international accounting tool for leaders to quantify greenhouse gas emissions. The team also requires companies to recertify every year.
To date, at least 75 brands and companies are Climate Neutral Certified, including bread maker Bread Alone, tea company Numi Organic Tea, and mattress company Avocado Green Mattress. Others have committed to joining, including shoe company Allbirds.
The name of the nonprofit, and its label, is a play on the phrase “carbon neutral,” which means the company has “net zero emissions,” or that the CO2 the company is producing is no greater than the amount of CO2 it’s re-absorbing from the atmosphere through offsets. Minimizing a company’s carbon emissions is imperative to slowing down climate change, which is linked to stronger hurricanes, more intense wildfires, and polar ice melt, to name a few. The more carbon dioxide that’s in the atmosphere, the less sunlight and heat can escape into space. This trapped heat effectively cooks the planet.
An example of offsetting one’s carbon footprint would be to fund a wind farm project that generates clean energy or to plant an acre of trees (trees absorb CO2).
To become Climate Neutral Certified a company has to do three things, according to the nonprofit.
- Measure how much the company is currently producing in CO2 emissions.
- Offset emissions by purchasing carbon credits for projects such as ones that capture biogas from livestock, capture methane gas from landfills, or restore degraded forests.
- Make steps to reduce emissions going forward through resources Climate Neutral has.
Business Insider recently spoke with Austin Whitman, CEO of Climate Neutral, to learn more about the nonprofit’s mission.
This interview has been lightly edited for clarity.
Whitman’s vision is to have the “Climate Neutral Certified” label be as recognizable as the “USDA Organic” label.
Marguerite Ward: Tell me about the conversation that led to Climate Neutral, and the idea for a label?
Austin Whitman: The initial spark for Climate Neutral came when our founders and two lead funders, [Peter Dearing of outdoor product company Peak Design and Jonathan Cedar of energy company BioLite], traded notes about taking their companies through the process of measuring and offsetting their carbon footprints.
They both realized it costs more to hire a consultant to measure your carbon footprint than it does to offset the entire thing. So most companies don’t do it at all — and that’s a problem.
The second was a realization that there is nothing like a USDA Organic label for climate. That’s also a problem, considering the extreme problem of climate change. Consumers just haven’t been engaged effectively as part of the solution. They are thirsty for ways to make a difference, but they’ve been seeing the same list of solutions for the past three decades: “Recycle! Walk, don’t drive! Lower your thermostat!”
Policy is not working at a level and on a timescale that we need.
Ward: The goal is to have Climate Neutral Certified become as common and recognizable as the organic certified or fair trade certified label you see on products right?
Whitman: Yes, that’s right. Every company in every sector has a carbon footprint, and Climate Neutral Certified can be applied to virtually any type of company.
Ward: Why create a label, why not perhaps take other avenues like pushing for tighter regulation or policy?
Whitman: It’s not an either/or decision. Companies and individuals should be pushing for better policy. But climate change first became a subject of policy debates more than a half a century ago, and we still have no policy. It’s not that we haven’t had the facts. Modern climate science is 40 years old, we just haven’t had the political will. So policy is not working at a level and on a timescale that we need. Businesses and consumers can move much, much faster than policy.
Whitman says having concrete guidelines for businesses will fight corporate greenwashing.
Ward: Is there a lot of greenwashing going on in the corporate world? Tell me what you’re seeing going on.
Whitman: Greenwashing [the act of making marketing claims that overstate a company’s environmental commitments] is difficult to quantify, but it does happen. In the 18 months since interest in climate change began to rise, we have seen many many commitments, pledges, and promises by companies to address their carbon pollution. We see greenwashing take two forms.
Some companies count only a tiny share of their carbon footprint when they claim to have made progress against climate change. Some companies claim credit for making promises that will come due 40 or 50 years from now. We are trying to rectify both of these by requiring companies to count all of their emissions, including emissions in their supply chain, and by requiring companies to take immediate steps to achieve a net-zero carbon balance for their operations. Both of these are far better aligned with what’s necessary to deal with climate change in a meaningful way.
Ward: But there’s a lot of positive change, too, right?
Whitman: Oh absolutely. The biggest difference in what’s happening now is that people from all professions and industries are paying attention, learning about climate change, feeling a sense of urgency, building communities around climate concerns, and in some cases reorienting their entire careers around this vexing global problem. I think that sort of groundswell of awareness and change is what will make this a structural, long-term shift toward taking climate change into account in how we shop, how we vote, where we live, and so many other decisions that humans make. This is where we see companies and consumers working hand-in-hand: companies can embrace this new consumer trend and reinforce it, helping it to gain critical and irreversible momentum.
Fighting climate change now is cheaper than dealing with the effects later, the CEO says.
Ward: How does Climate Neutral sustain itself? Do you take a commission from businesses who are a part of the coalition?
Whitman: We’re a lean nonprofit, entirely donation funded for the moment, through a combination of grants and individual donations. We promised not to charge companies this year to get certified. We do charge a small commission to arrange carbon offsets for our certified companies. As we grow, and as we prove that our label has value to companies, we will look to become more self-sustaining, but grants will continue to play a critical role in our funding model for the foreseeable future.
Ward: Why should a company be a part of your mission? How do you respond to critics who argue that additional regulation, even if it’s self-imposed, would hamper productivity or increase product costs?
Whitman: We all need to get over thinking that addressing climate change would be nice but it’s just too expensive for us to deal with right now.
Of course, it’s not free to deal with climate change, but it costs far less than people would imagine. Climate economists estimate that we need investment equal to about 2 to 3% of global GDP every year to achieve the transition we need. Much of that comes in the form of investment that can enhance productivity.
And it’s certainly far less expensive than it will be to deal with the increasing effects of climate change. Just ask the people who have been affected by any of the massive natural disasters that have happened in the last two years. And there’s an important difference in those numbers: spending billions of dollars on storm cleanup costs is emergency spending, not long-term investment. Dealing with climate change proactively gives us a chance to make deliberate investments in the lowest cost and most effective types of solutions. Even if self-imposed regulation adds 2% to product costs, the effect on sales would be minimal.
Ward: You have 74 brands committed, right? What’s next?
Whitman: This Earth Day, we’re announcing more than 75 companies are now certified. We have another 50 plus brands committed to getting certified later in the year, and a list of others we’ve been talking to.
We’ll continue to recruit more and bigger brands and build consumer awareness of the label. We want to be counting our annual impact in terms of tens of millions of metric tonnes of carbon emissions, which would be a measurable share of total US emissions, and think we can get there within the next two years.