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What does “climate neutral” mean?

The term “climate neutral” is widespread, but it often causes misunderstanding and confusion. That’s because in most cases it doesn’t mean that no emissions are produced, “merely” that emissions are offset by climate protection projects. That’s why myclimate no longer uses this term. A more effective approach than calculating climate neutrality is transparent communication by companies and organisations about their own climate protection efforts.

What does “climate neutrality” mean?

Climate neutral means that all the greenhouse gases produced by a product, service or process are offset by climate protection measures. But this doesn’t necessarily mean that emissions are reduced, or that there are no emissions in the first place. Instead, the carbon emissions are calculated and offset through financial support for recognised climate protection projects. These could be projects that support long-term reforestation, for instance, or that promote the expansion of renewable energy.

This means that to date, all companies, products, services and processes could be “climate neutral” in principle – regardless of how much pollution they cause.

Important: Climate neutral does not mean carbon-free. While climate neutral indicates that emissions that have been produced are offset, carbon-free means that there were no carbon emissions in the first place – anywhere in the supply chain.

 

Why does myclimate no longer refer to “climate neutrality”?

myclimate has decided not to use the terms “climate neutral” and “climate neutrality” anymore. There are two reasons for this.

First, the regulatory environment has changed in the wake of the Paris Agreement. To prevent double-counting of emissions reductions, “corresponding adjustments” (CA) were introduced. These serve as confirmation of emissions savings from the country that hosts the climate protection project in question, and allows a company, for instance, to have this credited as their own compensation.

But there are no countries issuing CAs as yet. That means companies can’t have compensation credited at all, with the further consequence that they can no longer make claims of climate neutrality. Compensation can also diminish incentives for preventing and reducing emissions – yet for the long-term attainment of climate targets it is crucial that the volume of carbon and other pollutants entering the atmosphere be kept to a minimum.

The second reason is that for many people, the term suggests that absolutely no emissions are produced. This leads to misunderstanding. And it means that companies that use “climate neutral” in their communications can soon face accusations of greenwashing.

 

When does it make sense to continue using the term climate neutral?

The term “climate neutrality” still carries a constructive, important meaning. It can be applied in such contexts as long-term emissions targets, for example in the case of countries or cities that are aiming for net zero emissions by a certain point in time.

The Swiss government, for instance, has resolved that the country will be climate neutral by 2050. This was approved by more than 59 per cent of the electorate in a referendum on the new climate law in June 2023.

Despite criticism, marketing statements for products can still generally use the term “climate neutral” and similar descriptors. But this kind of “green claim” will be subject to more stringent regulation in the European Union, for instance.

France has already taken this step, introducing strict rules for environment-related marketing claims at the beginning of 2023. The EU as a whole is looking to tighten the reins with its plans for a stricter green claims ordinance. This would mean that in future, advertising of this kind would only be permitted in individual cases.

The impact in the individual member states will depend on the specific application of the ordinance in national legislation. But green claims are already coming under pressure. Consumer organisations in Switzerland and Germany have brought complaints and appeals against companies that market themselves with the term “climate neutral”.

 

How can businesses credibly disclose their climate contributions without using the term “climate neutrality”?

For myclimate, effective climate protection means more than just compensation; instead it can be summarised by the phrase “do your best, and finance the rest”.  
The three key steps are:

  • avoiding emissions
  • reducing emissions
  • financing additional climate protection

That means, in concrete terms, that companies and organisations should start by determining measures for the long- and short-term avoidance and reduction of their own emissions to keep their greenhouse gas output as low as possible. But this kind of reduction path takes time before it can make a positive impact. And not all emissions can be prevented with the technology available to us today.

This is where investment in climate protection projects comes in, because it really does have an immediate impact on the climate. So the second step for companies and organisations is to support climate protection projects with a scope that corresponds to the emissions they cannot yet avoid.

myclimate also advises discussing these efforts comprehensively and openly, with transparent, voluntary disclosure. This prevents accusations of greenwashing arising in the first place, or at least proactively helps to defuse them.

 

The myclimate impact label

The “Engaged for Impact” label is myclimate’s response to these developments and it offers a companies a way of credibly disclosing their commitment to the climate to the outside world. By using the impact label, they are signalling that they take responsibility for the emissions calculated and verified by myclimate, and that they are making a positive contribution to the attainment of global climate targets.

And to help organisations navigate the hazards of public perception around this issue, myclimate also supports them in communicating this commitment.

Sources:

Klimaschutzprojekte als Königsweg (swisscleantech.ch)

Klimaneutral - Was bedeutet das eigentlich? (climatepartner.com)

Klimaneutralität (klimaneutralitaet.de)

Verbräuchertäuschung mit vermeintlicher „Klimaneutralität“ (duh.de)

Konsumenten­schutz reicht Beschwerden ein gegen Swisscom, Coca‐Cola und weitere Firmen (tagesanzeiger.ch)

Green claims (environment.ec.europa.eu)

 

You can find further exciting information on the subject of climate change and climate protection in our climate booklet

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