By Jim Jarman

Earlier this year, the European Commission published a proposed Green Claims Directive to avoid misleading environmental messaging across EU markets and address greenwashing concerns. Though Neutral’s products are currently only available in the US, Neutral supports legislation like this because it brings more understanding to carbon neutrality and separates the companies genuinely working toward carbon neutrality from those that are greenwashing.

There’s a lot to unpack here…

LABELING INITIATIVES

In a nutshell, the Green Claims Directive is the EU’s first set of rules for how companies can market their environmental initiatives and impacts. These rules establish new minimum norms for how companies substantiate, communicate and verify their environmental claims to consumers in the EU. One of the key areas of the Directive is related to how companies are – or are not – allowed to use carbon offsets to support their environmental claims. For climate-related claims such as “CO2 neutral” or “net zero”, the proposed Directive requires companies to distinguish between their own emission reduction efforts and the use of carbon-offsetting programs, such as planting trees, and requires transparency about the share of total emissions addressed through offsetting.

“We are bringing an additional level of stringency on how companies can use offsets. The whole goal is to make sure that the reductions take place in the organization making a claim to approve. We are not forbidding claims related to offsets, but we are stringent on how to substantiate these and to communicate them to consumers. The message needs to be clear, we are not banning carbon offsets, they are allowed,” stated Environment Commissioner Virginijus Sinkevičius, who presented the proposal in the EU earlier this year.

With little current legislation regulating these claims around the globe, climate-related statements such as “climate neutral,” “CO2 compensated,” and others could be confusing or even misleading for consumers. These statements can be based on offsetting emissions through carbon credits generated outside a company’s value chain, for example, in forestry or renewable energy projects when the purchasing company is in a different industry. A key goal of these requirements in the proposed EU Directive is that consumers have more information and are fully informed about the claims being made.

“…the proposed Directive requires companies to distinguish between their own emission reduction efforts and the use of carbon-offsetting programs, such as planting trees, and requires transparency about the share of total emissions addressed through offsetting.

TRANSPARENCY IS GOOD FOR CONSUMERS

Labeling transparency and credibility is an issue that we care deeply about at Neutral, whether the focus is on the accuracy of broader claims, or the methodology of measuring carbon footprints. Explicit carbon footprint labeling is a growing topic of discussion in the U.S. Neutral is supportive of every company disclosing the footprint of their products, whether on the package or on their websites. That being said, differences in how companies do this can cause confusion for consumers.

Neutral uses a life-cycle assessment methodology that includes the whole life of the product and includes the beginning stages like fertilizer for crops, the farm processes, the transportation and bottling of the milk, the journey to the grocery store and even you getting the carton home and eventually recycling it. Many other companies stop their assessments at the manufacturing process and skip everything that comes after while others include only the activities that happen on the farm. Given the variety of assessment methodologies, it can be challenging and confusing to make comparisons between companies. Legislation like the proposed EU Directive has the opportunity to help change that. While different labeling initiatives are happening in different geographies, they highlight key points for consumer-facing brands in any market.

“As the first carbon-neutral food company in the US, we know it’s critical for consumers to be able to trust the claims being made about their food.”

As the first carbon-neutral food company in the US, we know it’s critical for consumers to be able to trust the claims being made about their food. This is one of the many reasons we support policies that promote transparency for consumers and limit misleading claims. Companies should be accountable for acting with integrity and accurately reporting on their claims. We also believe companies should be able to tell the story of their legitimate work and, importantly, the proposed EU Directive still allows for that.

We lead with transparency for a reason, and believe that everyone should. Our carbon neutrality claims are audited and certified by independent third-parties, SCS Global Services, to further ensure customers can be confident in the science behind our approach.

RESULTS MATTER MOST

The most important work companies can do is in the actual supply systems, which is why we have already invested in more than 35 on-farm carbon reduction projects that will have reduced over 2000 MT CO2e by the end of the year. Partnering with farmers is at the heart of what makes Neutral unique. We work with farmers who take the long view (literally generations-long) when planning for their farms, and those who know it’s critical to be both economically and environmentally sustainable. That’s why we provide up-front resources to farmers and ranchers, including funding, technical expertise, and documentation support that enable them to make significant reductions in the greenhouse gas emissions of their farms. We believe this is exactly the kind of work that the EU Directive and other similar initiatives are intended to support: real and verifiable reductions being driven in the supply chain by the company making the claims, and the ability of the company to share that progress with their customers and stakeholders.

Neutral focuses on reducing the impact of agriculture because food is the only major category of emissions that has the potential to actually flip from an emissions contributor to an emissions sink. When food is produced in climate-smart systems, it can lower the footprint dramatically and, in some cases, actually become net negative emissions contributors. These reductions are especially critical in areas that have some of the highest total carbon footprints and the highest carbon intensities. Neutral focuses on animal agriculture, particularly dairy and beef, because these are the areas where we believe we can make the biggest impact. By supporting farmers’ transition to climate-smart practices, it is possible to generate major emissions reductions that are real, verifiable, and permanent. Farmers are some of the original stewards of the land, and when we support them with the right financial, technical, and documentation resources, we can make a significant and lasting impact together.

“Neutral focuses on reducing the impact of agriculture because food is the only major category of emissions that has the potential to actually flip from an emissions contributor to an emissions sink.”

Checking in on a pasture project in Oregon

PROGRESS OVER PERFECTION

There are certainly challenges in all forms of food production but, at Neutral, we like to highlight and celebrate the progress companies (and yes, even competitors) are making. We believe it’s more impactful to promote meaningful progress than to decry any solution that isn’t perfect, and frankly, no solution is perfect. The climate challenge is one of the biggest and most complex issues we face as humankind, and there is no singular solution.

One of the reasons we’re focused on transparency is that we know it’s easy to get confused with all the different voices out there, especially when they all have different incentives and goals. We support the consumers and the companies who are making choices to support a better climate future, whether they’re choosing carbon neutral products, regenerative ones, organic ones, plant-based ones, etc. There’s no such thing as a singular perfect solution to our climate challenge, but we want to celebrate the progress, and challenge everyone to come along on this journey as we strive together to reduce the impact of our food system.

“There’s no such thing as a singular perfect solution to our climate challenge, but we want to celebrate the progress, and challenge everyone to come along on this journey as we strive together to reduce the impact of our food system.”

How you can trust food claims: a new era of transparency