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Climate Neutral logo on teabag brewing in cup
Image credit: Climate Neutral

On Earth Day 2021, Climate Neutral says it has signed 230 brands to its net-zero certification

April 22, 2021

Consumers are becoming ever more curious about the carbon footprint of their diets. As a result, more companies seeking out auditing services to understand what their footprint might be – and how they can curb emissions.

Certification company Climate Neutral is one of those services aiming to give businesses a hand.

“Data collection is often more difficult than people expect it to be – even simple stuff like tracking down utility bills. People are busy and it can get frustrating,” CEO Austin Whitman told AFN.

The San Francisco-based nonprofit today announced that, since launching in 2019, it has certified 230 brands as ‘carbon neutral’ to date – 14% of which belong to the food and beverage industry.

This more than doubles the number of brands that Climate Neutral has certified to date, creating a carbon offset of 700,000 tonnes by its estimate. It says it has another 125 brands committed to achieving its certification later in 2021.

Companies in the food and beverage segment that are named on Climate Neutral’s website as having obtained the certification are:

The nonprofit claims its certification process is “the gold standard in carbon emission regulation” because it demands that candidates achieve net-zero emissions “from cradle to customer” similarly to the Greenhouse Gas Protocol. Once they achieve this status, they get to use the Climate Neutral Certified logo on their packaging and branding.

Every company that earns the certification must then offset its emissions according to Climate Neutral’s standards and create a reduction action plan to reduce its footprint over the next one to two years.

The organization uses what it describes as a “rigorous” three-step framework that requires brands to measure, offset, and reduce carbon emissions until they hit zero. The main focus of its accounting and reduction process is a carbon calculator that it created to help brands measure corporate emissions called the Brand Emissions Estimator (BEE)

There are a variety of standards emerging for assessing carbon emissions and efforts to reduce or offset them. Some people have started to raise concerns about the growing list of methodologies and whether they are being used appropriately. 

Whitman is aware of the competing methodologies, but urges everyone to see the forest for the trees instead of getting caught up in the details.

“I think it is important to have credible data but I think it’s paralyzing to seek too much precision because you end up focussing on the wrong thing – like whether my carbon footprint is 1,000 or 1,001 tonnes – and not focusing on the right thing, which is how to take that from 1,000 or 1,001 tonnes down to 300 tonnes or zero,” he said.

Keeping pace with consumer demand

There are myriad factors encouraging brands to assess their carbon footprint, according to Whitman. 

“Sometimes we’ll get wind of someone implementing a sustainability plan and maybe we’ll give them a call and see [how] they are thinking about [it],” he said.

“On the flip side, we do get a lot of inbound interest because people see the label and they are curious to figure out what it would take to get certified.”

During 2020, 43% of the new brands that Climate Neutral worked with were from referrals, which Whitman described as a “powerful growth engine” for the nonprofit.

Brands come to Climate Neutral with a variety of perspectives and starting points, too, and fall into two broad groups.

“First, [there are] larger companies who have been doing sustainability and climate for a while and who have work underway. The certification process for them usually means organizing that work and collecting documentation to make sure it aligns with our standards,” Whitman explained.

“On the small and medium [enterprise] side, climate is something that they know about but they haven’t figured out [and] they probably aren’t doing anything yet. It can be a little overwhelming when we tell them they have to reduce their carbon footprint in a matter of 10 weeks and that they will be certified in 12 to 14 weeks – but we haven’t had anybody drop out yet because of the complexity.”

But as for the main drivers behind brands’ interest, it all comes back to consumer demand. Research suggests that many consumers are willing to pay more for products that have a green halo around them; and between 2015 and 2019, products with sustainability messaging accounted for 54.7% of consumer packaged goods market growth while only making up 16.1% of total products in the category.

Even during the Covid-19 pandemic, products with sustainability attributes saw a boost in sales – particularly among millennial, college-educated, higher-income, and urban consumers. 

Nestlé recently announced that it is investing $3.6 billion to curb its carbon emissions while increasing the number of net-zero brands in its stable. Danone is investing $2.18 billion to cut its climate impact, while beverage titan Diageo has made commitments to reach net-zero carbon emissions throughout its operations.

There’s also a heavy emphasis on using innovation as part of the carbon-cutting process. Mondelez launched a new platform earlier this year called The Sustainable Futures aimed at incubating, financing, and supporting businesses that address global challenges like climate change.

Despite all this momentum, brands often still have questions about the ultimate payout.

“The bigger the company is, the more we’re asked about the ROI case from a consumer perspective,” Whitman said.

“‘How many consumers are going to choose my product because it has the label over products that don’t have the label?’ There’s no question that a major driver of our growth is our focus on labeling because we help companies speak about climate. And we’re fairly used to explaining the research showing [that] consumers are looking for sustainable products.”

Moving forward, Climate Neutral is staying focussed on bringing more brands to the table, Whitman said.

“I would say within the next two to three years we will get to a point where maybe close to half of the products on the shelf make some mention of carbon or climate.”

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