Why EU should ban climate neutral claims now

As sustainability and mindfulness for the environment begin to shape consumers’ purchasing choices, an increasing number of companies are jumping on the bandwagon by advertising their products and services as "climate neutral". But many of these claims are misleading and the EU needs to take action, writes Roberta Arbinolo.

Roberta Arbinolo is a senior communications officer at the European Environmental Bureau, Euroactiv reports.

"Carbon neutral", "zero-emission", "climate positive’" from food to clothing to intercontinental flights, an ever-increasing number of products and services are advertised as good for the climate – but are they? 

With consumers increasingly caring about the environmental and climate impacts of their purchases, climate neutrality is one of the most widespread green claims on the market – as well as one of the most misleading. 

Here are three reasons why EU legislation to empower consumers and counter greenwashing should ban them now.

A dangerous distraction 

Despite the proliferation of climate-related claims, neutralising the climate impacts of a product, service or company remains virtually impossible, and too many corporate climate plans are just a facade. 

Earlier this year, a report by Carbon Market Watch exposed how most climate pledges and strategies advertised by 24 major global corporations lack ambition and integrity.

Most climate neutrality claims are not based on actual emission reductions, but on the purchase of offsetting credits. The idea is that companies and individuals can compensate for their carbon emissions by supporting worthy projects that reduce or remove emissions elsewhere.

However, many offsetting schemes have proven misleading and ineffective at tackling the climate crisis. A recent investigation revealed that over 90% of rainforest carbon offset sold by the world’s leading certifier Verra were worthless ‘phantom credits’ which may actually worsen global heating. 

Moreover, carbon offsetting markets act as a dangerous distraction from the crucial priority of reducing greenhouse emissions at source.

At the same time, vague climate claims that cannot be backed by evidence muddy the waters of corporate climate action and makes it harder to distinguish the companies that are striving to reduce their impact from those that are just greenwashing. 

For ClientEarth, the spread of unregulated advertisements involving “net zero” or “climate neutral” claims has become a systemic barrier to cutting emissions and achieving climate targets. 

Confusing consumers 

Vague climate neutrality claims mislead consumers into believing that products, services or entire companies are climate-friendly when it is not the case: in fact, it is often highly polluting sectors, like aviation and automotive, that use them to appear greener. 

A survey run by a German consumer organisation showed that only 3% of respondents knew what the term ‘climate neutral’ really means. A similar survey by the Dutch Authority for Consumers and Markets echoed these findings, with one in two consumers seeing little to no difference between carbon reduction and carbon offset.

Most consumers are not aware of the offsetting mechanism and rather expect products advertised as climate neutral to be manufactured with little to no net impact to the planet. 

Among the respondents to the German survey, green-minded consumers were particularly inclined to believe that carbon-neutral claims signalled a company’s dedication to lowering its CO2 emissions. 

In the dock in court 

The raising concern around vague and deceiving climate claims has sparked a surge in litigation cases emerging from various sectors of society. Environmental NGOs, consumer organisations and national authorities are taking legal action against companies for spreading deceptive climate claims. Even companies have started to challenge misleading assertions made by competitors that unfairly put them at a disadvantage.

In Germany, EEB member Deutsche Umwelthilfe (DUH) secured victories in two court cases this year: one was against TotalEnergies for their alleged promotion of “CO2-compensated heating oil,” and the other against the drugstore chain DM for advertising products as “climate-neutral” or even “environmentally-neutral.” 

Environmental law charity ClientEarth has been using EU consumer legislation to challenge corporate climate-washing by TotalEnergies in France and KLM airlines in the Netherlands. 

In Sweden, a court has banned European dairy major Arla Foods from selling its products as “net-zero climate footprint”, following a report by the Swedish Consumer Agency. 

In Italy, a micro-fibre products manufacturer took a competitor to court for vague, false and non-verifiable environmental and climate claims that constituted unfair competition, and won the case. 

At the EU level, the European Consumer Organisation BEUC and its members have filed a complaint to the European Commission and the network of consumer protection authorities denouncing misleading climate-related claims by 17 European airlines.

Beyond the courtrooms, the Voluntary Carbon Market Integrity Initiative (VCMI) has released a code of practice for claims this July, recommending that companies move away from offsetting claims. 

In response to the rising criticism, providers of carbon credits such as South Pole and My Climate have stopped offering ‘climate neutral’ labels and have now rebranded them as ‘climate action’, ‘climate contribution’, and ‘impact label’. 

To empower consumers, ban climate-washing 

Right now, the EU will have a major opportunity to take on climate-washing claims and labels. 

In the upcoming weeks, the European Commission, Parliament and national governments will agree on the text of a new law to empower consumers and curtail the misleading company tactics that hamper sustainable shopping choices.

Last spring, the European Parliament voted to ban all claims based on carbon offsetting that insist on a neutral, reduced, compensated or positive greenhouse gas emission impact on the environment. 

As the debate on climate claims heats up and court cases multiply, allowing the use of such claims would send the wrong signal and would not do companies a favour: instead, EU negotiators should confirm the ban and provide clear policy guidance in line with court rulings.