Today we announced a major update for our certification program. Two big changes will take place in 2025:
First, we are moving away from a 'carbon neutrality' model. Certified companies will now demonstrate that they meet our threshold of total funding for climate projects.
Second, starting in 2025 our leading, independent label, Climate Neutral Certified, will be called The Climate Label.
We spent more than a year engaged with people across our community and went through many iterations to land on these changes. The evolved approach recognizes that companies must support a wide array of projects in order to eliminate carbon emissions faster. It also rises to the urgent need for climate funding.
When our team first identified the need for a successor to the Climate Neutral Certified label, we asked a basic question: What foundational ideas are key to success of the voluntary climate movement - but missing today?
We then began to read: regulations, white papers, websites, you name it. Anything we could find related to corporate climate action. We considered dozens of approaches before we concluded that our path forward should employ a well established concept: carbon pricing, which has been hailed for decades as a potentially game-changing tool for climate policy. We landed on carbon pricing’s close cousin, the voluntary flavor commonly known as an “internal carbon fee.”
Across the many articles, conversations, sustainability reports, and disclosures that come out each year on the state of global progress to net zero, one thing is consistently missing: dollar signs. Not just how much money a company spent on a flashy new climate project, but how much money a company puts into all projects together — and how that money ties to the company’s emissions.
To be sure, money isn’t the same as outcomes. (The philanthropic world knows this well.) But outcomes rarely happen without money, which makes it concerning that we really don’t know how much money is going toward achieving long term corporate climate targets.
So we felt good about this first principle: center the question of funding.
To create the rest of the new framework, we incorporated much of what’s in the existing certification Standard for measurement, reduction planning, and advocacy. But we also needed to add detail around how the money should be used. We started by looking, with the help of a team of volunteers, at how voluntary climate funding is spent today.
And, perhaps to no one’s surprise, we didn’t find much.
Nearly every analysis of the total “market” for voluntary corporate climate funding focuses just on the voluntary carbon market (VCM). It’s an important piece of the pie, but by no means is it the whole pie. And when you look even just the VCM piece in the context of the need for net zero funding, you see that it is just 1/2000th of what is needed for the transition.
That’s a serious lack-of-scale problem.
So, we found no data on all of the things companies are (theoretically) doing to meet their science-aligned reduction goals and put themselves on a path to net zero by 2050. This felt like a problem - and an opportunity.
The 2025 Standard identifies eligible projects across a certified company’s value chain and beyond it. Instead of getting too crafty about nuance, we look at total qualified funding by the certifying entity.
We’ll explore the guardrails and thresholds and details in the weeks ahead, but today we’re excited to be introducing the 2025 Standard and The Climate Label. If you’re an individual consumer or employee, and you’re trying to identify climate leadership by companies, The Climate Label will be the first-of-its-kind certification mark based on an examination of active corporate funding for the net-zero transition.
We believe this framework can help us all move past the crippling debate about the “right” way for companies to fund the future, and get the funding going. Because putting a couple of billion dollars into the wrong places is not how we're going to break the climate. Scaling those billions to trillions is the key.
We know that there is no such thing as perfect when it comes to any climate action frameworks. So we will continue to run our annual stakeholder and advisory review process to improve things as we all learn what’s working. (Note: you can always share feedback at standards-input@changeclimate.org.)
There are so many reasons why we’re excited about this evolution. People care about outcomes, not talk, and the outcome of this evolution is a label that looks at climate action through a new lens of immediate impact, using the time-tested principle of carbon pricing.
You can help us make this evolution a win for the climate:
The Climate Label is here. We look forward to growing it into the world’s most trusted mark of climate leadership — and motivating thousands of companies to get going with funding for the transition to a net-zero future.
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Austin Whitman is the CEO of The Change Climate Project. He started working on climate and clean energy 19 years ago and believes companies and individuals can make a huge difference for the climate if they're just shown how. When he's not engrossed in organization-building, he's probably with his family or being an amateur at one of his many hobbies.
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