advertisement
advertisement

Climate Neutral is trying to build a net-zero labeling system that drives change–and dollars

To earn the label, companies must not only show how they’re offsetting current emissions, but also lay out a plan for future carbon reduction.

Climate Neutral is trying to build a net-zero labeling system that drives change–and dollars
[Image: Climate Neutral]

In a sudden and unanticipated move, Senator Joe Manchin approved a legislative bill that would deliver the most federal climate spending ever, to the sum of $369 billion. Lawmakers suggest it would allow the U.S. to reduce carbon emissions by 40% of 2005 levels by 2030. But it hasn’t yet passed, and despite the hopeful moment, the Inflation Reduction Act leaves gaps. Biden’s aim, in line with the Paris Agreement, is to reach 50% by 2030, which would keep global warming at 1.5 degrees Celsius.

advertisement
advertisement

For a long time, Austin Whitman has been disappointed by a lack of meaningful climate policy action from the federal government. “Whether climate policy does or does not happen at the federal level to me is, at this point, somewhat moot,” he says. The policy gap has left “this huge enormous hole in how we’re going to actually reduce emissions.”

[Image: Climate Neutral]
His answer in 2019 was to cofound a nonprofit that would support companies in meeting their carbon emission reduction goals. The organization, Climate Neutral, of which Whitman is CEO, certifies small and large businesses that prove they’re offsetting their carbon—and, crucially, also ensures that they have set out a carbon reduction plan for the future. The reward: a product label that consumers can view when they shop. Though it’s one of many private eco-labels, experts say its approach stands out, and that exerting its dominance from the bunch would help customers build trust in the system.

[Image: Climate Neutral]
Earning the certification requires a process that takes about four months. Companies must detail their complete emissions for the past year, across the supply chain, and how they are offsetting those emissions, whether through carbon credit programs, power purchase agreements, or renewable energy certificates. Then, they must show how they will reduce their carbon footprints over the next 18 to 24 months. They must reapply annually, to reflect the group’s yearly updated criteria (for 2023, for example, it will bar the use of crypto credits).

advertisement

[Image: Anheuser-Busch]
So far, Climate Neutral has certified 294 companies, 80% domestic and 20% abroad, including Allbirds, Kickstarter, Klean Kanteen, and REI so far measuring and offsetting 1,077,544 tonnes of carbon. A recent brand to join is Bud Light Next; Anheuser-Busch will be the group’s first Fortune 500 company partner. The beer brand will be the company’s first zero-carb beer and its first net-zero beer. Steve Wolf, the brand’s vice president of marketing, says it chose Climate Neutral because it’s “a leading authority in the environmental space that aligned with our sustainability goals.” Whitman would like to one day partner with the entire Anheuser-Busch company, which aims to achieve net zero by 2040.

Michael Vandenbergh, professor and director of the Climate Change Research Network at Vanderbilt University Law School, who coauthored a paper on carbon labeling systems earlier this year, values Climate Neutral’s approach, particularly its urgency. “Doing something now is better than the perfect solution several years from now,” he says. He notes that a common trap other labels fall into is too heavy a reliance on offsetting, but that Climate Neutral makes a dedicated effort to focus on future carbon reduction plans. He likes that it considers the entire supply chain (what Whitman calls “cradle-to-consumer emissions”), noting that, for many companies, the majority of emissions come from early in the chain.

[Image: Climate Neutral]
Still, Whitman says offsets are essential, especially at this early stage, because it’s usually not possible to reach net zero with future reductions alone. “Companies will tell you, ‘we’ll get to net zero by 2040,’ but they do not know how to do that,” he says. And the immediacy of offsets is essential, “to minimize the risk that you get to 2040, and there’s simply no way to supply the level of mitigation that needs to happen.”

advertisement

The labeling field is jam-packed. Ecolabel Index, a tracker of these tags, says that there are 456 in 199 countries. But they vary on their focus, from recognition of responsible composting to eliminating animal testing. For Vandenbergh, no carbon labels have become dominant, which presents an opportunity for Climate Neutral. “It is a crowded space,” he says, “but it’s also a space where a well-designed, NGO-backed label could take off.” That’s Whitman’s aim; for him, narrowing the field is important to eliminate consumer confusion and create trust. “There is only one USDA organic label,” he says. “There’s one Fair Trade. I think that there needs to be convergence on a single standard.”

Even if the climate bill passes, Vandenbergh agrees with Whitman that the private sector still has a role to fill government shortcomings. “Carbon labeling is important, because government is not going to solve the climate problem in time,” he says. Besides, he believes consumer behavior will be a major driver of corporate decarbonization, as the public becomes more and more determined to actively choose carbon-friendly items. When that happens, companies will have to respond quicker than politicians have. “Politicians can gerrymander their districts,” he says. “But companies can’t gerrymander their markets.”

advertisement
advertisement