The Key to Credible Climate Impact Claims

We are operating in an era of increasing corporate targets and action on climate. According to our 2021 research there has been a three-fold increase in Fortune 500 companies setting net zero targets, a 50% increase in the number of companies that have either achieved carbon neutrality or are targeting it by 2030, and a 25% increase in commitments to science-based targets. With that increase, comes a proliferation of different claims and ways that corporates are talking about their climate impact. And increasing scrutiny about what makes a claim credible. Claims about offsetting, carbon neutrality and net zero are no exception.

In response, as the Voluntary Carbon Market continues to grow, a number of bodies are seeking to tackle this issue and bring consistency and clarity to corporate claims. In the last month, we have seen the release of new guidance and consultations from the Voluntary Carbon Markets Integrity Initiative (VCMI), Gold Standard, the U.S. Securities and Exchange Commission (SEC), and the Nordic Dialogue on Voluntary Compensation.

How can your team navigate the multitude of advice and find the best way to express your climate action?

What’s changed in the last few months?

Many organizations are updating their advice and guidance to corporates on how they should talk about their participation in the Voluntary Carbon Market.

Whilst each set of guidance has a different view on specific aspects, there are some areas of commonality emerging, that center on how companies use carbon credits and what sort of claim they can make. These areas include:

• The need for a science informed carbon reduction target to cover your climate impact
• Transparency about when carbon credits are used and detail about what is used
• A continued focus on using high quality, high integrity carbon credits
• The requirement to use only credits from carbon removal projects, to support a net zero claim
• The need to set interim milestone reduction targets and for transparent reporting on progress towards those targets

It’s important to note that these points are still under discussion, and many of these documents are still at consultation stage. That said, being aware of these emerging trends is important to ensure the statements you make about your climate action are credible.

At a top level, best practice dictates a need for consistency, integrity and claims that are easy for your stakeholders to understand. And it’s also important that you can easily track and report progress.

How can I make a credible carbon neutral claim?

The most important thing is to be accurate and not to over claim your achievements or confuse your audience. It can help to include information about:

• Your carbon footprint and how it was calculated

There are a number of recognized methods you can use to calculate your carbon emissions and different sources of emissions that you might or might not include. Tell your audience if you used an independent assessor or auditor to validate your measurements.

Be clear about exactly what is included in your calculations, so that you don’t mislead.

Include scope 3 emissions where you can. Or explain how you are taking steps to understand your scope 3 emissions.

If you’ve only measured scope 1 and 2 emissions, state that, and explain what that means in layman’s terms, for example – “we’ve measured our scope 1 emissions which are largely made up of [give an example] and scope 2, which includes the electricity purchased in our business operations”.

• Reductions you’ve achieved and your further ambitions

Explain what you have done to date to reduce your emissions, and how successful you have been. Share some of your challenges. State your future reduction targets (ideally science based), and how you plan to achieve these targets.

• What emissions you have offset, and what projects supported

Explain which emission sources you have offset, particularly if you have not offset your entire footprint. Share information about the partner you work with to offset your emissions, highlighting their ICROA accreditation and other credentials to demonstrate quality and integrity. Show the types of projects you have supported and why, how they work to reduce emissions, and what standards have verified the emissions reductions.

• Your use of recognized protocols and standards

Working to a recognized framework, like The CarbonNeutral Protocol demonstrates that you have followed a rigorous process to measure, reduce and offset your emissions, and allows you to be more transparent  in your claims. Those who achieve CarbonNeutral^® certification can use trademarked logos and are provided with claims guidance to help them make the most of their CarbonNeutral status.

And, before you publish, be sure to check applicable local and national guidance and legislation relating to environmental claims, which varies country to country and industry to industry, to ensure you comply.

How should I talk about our work to go net zero?

Most definitions of net zero for businesses center on taking action today by:

1. Reducing emissions in line with a science informed target
2. As you reduce your footprint on the journey to Net Zero, take responsibility for your remaining emissions by offsetting them
3. At the point of reaching a science-informed reduction target, offsetting all remaining emissions through carbon removal projects – projects like afforestation and engineered solutions that remove carbon emissions from our atmosphere.
   

Very few companies are in a position to claim they are net zero today, but many want to align to this ambition and demonstrate they are on a journey to this future state.

It’s important to be clear about your current carbon footprint and actions you are taking to reduce and compensate for it today, alongside any future intentions to become net zero. In addition, a clear and credible road map for you to achieve any future target, acknowledging the challenges, is an important part of demonstrating you have a credible approach to climate action.

There’s more on net zero for businesses on our micro-site and in our white paper: The ”net” in net zero.

What are the common criticisms levelled at companies who talk about offsetting?

There is scrutiny across all corporate ESG claims and offsetting is no exception. Common mistakes to avoid include:

• Overclaiming impacts. For example stating that you are a carbon neutral company, without a proper process to measure and compensate for all your emissions.
• Not demonstrating reductions. Offsetting is a means to take responsibility for the emissions your company emits today, and it sits hand in hand with actions you take to reduce your emissions. Research (and our experience) has shown that companies who offset their emissions often deliver the greatest carbon reductions. In fact, research shows that the typical offset buyer cut almost 17% of their scope 1 (direct) emissions, while the typical non-offset buyer reduced scope 1 emissions by less than 5% in the same year.  This is not surprising when you consider that as an extra business cost, offsetting puts a price on carbon emissions, driving reductions and efficiencies. Don’t forget to share the reductions you have made, alongside your offsetting activity.

• Not being ambitious enough. Claiming to be a climate leader, or celebrating your activity, whilst you lag behind other organizations in your industry will rightly lead to questions about the validity of your claims. Be sure to sense check your progress against your industry peers and competition, and use an independent protocol or auditor to build validity into your process and claims.
• Setting commitments too far into the future. Particularly if this is without including interim targets to demonstrate progress in reducing your footprint.
  

How can I ensure my claims do what I intend – demonstrate our commitment to real climate impact?

In summary, if your claims are transparent, accurate, set your actions in context of the challenge we face and what others are delivering, use independent advice or protocols where possible and are factual about your achievements, you will be a good way towards making a clear and credible claim.

Find out more

Climate Impact Partners clients are invited to join us for a webinar on 10 August at 11am EDT / 5 pm CEST, when Rob Stevens will talk in more detail about the latest policy changes influencing climate impact claims and we will introduce our latest communications guidance. You can view full event details here.

How we help our clients with their climate impact claims

At Climate Impact Partners, we have always advocated clear, accurate and robust claims, that help your customers and staff understand what you have delivered and why.

In this era of increased scrutiny, it is more important than ever to:

1. Work with a credible partner
2. Provide clear, accurate information to stakeholders
3. Stick to the facts and be careful not to overclaim or mislead.

Our marketing and policy teams work closely together to develop and deliver communications guidance that keeps pace with changing best practice and maintains the robustness and integrity of our client’s communications regarding the Voluntary Carbon Market.

While we can’t provide advice on meeting legal requirements, which vary country to country, our expert team takes time to review all our client communications to ensure they follow our guidance, including adherence to The CarbonNeutral Protocol, where appropriate, and provide advice on ways to make claims more accurate and robust.