The eco-conscious consumer might feel spoiled for choice. A huge variety of products – everything from running shoes to gin – are being sold with a “carbon neutral” label. But in practice this term is effectively meaningless, and it could undermine the credibility of your business to use it.

Too good to be true

The term “carbon neutral” means that the product reaches shelves (or doorsteps) with zero net emissions. When you consider the entire lifecycle of a product, from sourcing and transporting raw materials through to disposing of associated waste, it is hard to believe that this is possible – and your scepticism would be justified. Very few of the retailers claiming carbon neutral status for their products can back up their claim with reference to the entire process.

Not just manufacturing emissions

Some are making this claim because their factory runs on a renewable energy source and they are therefore reporting zero Scope 2 emissions from purchased electricity. But for most businesses, around nine-tenths of emissions are actually Scope 3, generated in their value chain. These are hard to track and measure because they relate to sources that you don’t directly own or control. We do not yet know of any business that has achieved zero Scope 3 emissions. It is a work in progress for even the biggest net zero pioneers.

If you want to reflect your factory’s green energy sourcing in your marketing, a more accurate claim might be “Made in a carbon-neutral factory” or “Our manufacturing is carbon neutral.” But even here you need to be cautious. Of course choosing a green electricity tariff or investing in on-site renewables is a step in the right direction. But given how many “renewable” energy tariffs are actually greenwashed, it is a bad idea to rely on a supplier’s labelling for your own green claims.

Offsetting is not the answer

Another common route to the “carbon neutral” designation is through offsetting. Rather than cutting absolute emissions to zero, the business aims to balance them through removing carbon from the atmosphere. This might be done through paying to preserve or enhance the world’s natural carbon sinks, such as forests or wetlands. Or it might be done through carbon removal technology. The problem? There simply isn’t enough planet to provide carbon abatement for the emissions we are currently producing, especially if we want to have some land left over to live and grow food. And there is no technology currently in existence which will offset current emissions levels either.

Offsetting can be a tempting route to claim carbon neutral status for a product or even a whole business. But the credibility of this route is seriously in doubt at the moment. Organisations who want to reduce their impact on the climate urgently need to focus on reducing absolute emissions instead, even if this means forgoing the “carbon neutral” label.

A crackdown is coming

Legislators increasingly recognise that greenwashing undermines climate goals by confusing consumers. The European Commission is close to bringing out an “anti-greenwashing law” that will make it much harder to make unsubstantiated claims. Here in the UK, the Advertising Standards Agency is calling on marketers to follow guidelines requiring them to provide evidence of their emissions reductions. The public mood is changing too, with consumers becoming increasingly sceptical of green claims.

The direction of travel is clear: it will soon be much harder to make claims like “carbon neutral” about products. The best strategy for businesses is transparency. By all means share your progress towards climate goals, but offer evidence for every claim.