What Does it Mean to be Certified CarbonNeutral?

Know Logo helps you navigate today’s greenwashed marketplace, one logo at a time. Next up: CarbonNeutral certification.

A rectangular glass-covered building with Microsoft's logo in Germany. Behind are 2 towers with the IBM and Fujitsu logos.
Photo by www.qso4you.com via Flickr

Corporations like Microsoft and IBM have made bold but dubious claims about reducing their carbon footprint.

If you’re trying to purchase from sustainable companies, maybe you’ve come across carbon-neutral shipping, clothes, or electronics. Practically any organization can make such claims—although some countries are cracking down on this—and offer a “carbon-neutral” certificate. Over 100 such certificates exist worldwide.

The CarbonNeutral certificate offered by the private company Climate Impact Partners (CIP) is a popular option. Launched in 2002, it’s one of the oldest frameworks of its kind and has been adopted by companies ranging from Microsoft to Yorkshire Tea. But in a sea of similar-looking certificates, is CarbonNeutral certification a useful indicator of eco-friendliness?

What is carbon neutrality?

“Carbon neutral” doesn’t mean a company or product has zero emissions, though it’s easy to slip into that misunderstanding with the CarbonNeutral certificate: its website says that to achieve carbon neutrality, a carbon footprint is calculated then reduced to zero. In reality, to make something carbon neutral, a company first quantifies its greenhouse gas emissions. Then it reduces them and offsets what remains.

What is the CarbonNeutral certificate?

Companies with the certification calculate, disclose, reduce, and offset emissions from specific products, services, or activities, or the company as a whole using the CarbonNeutral Protocol, a climate action framework developed by CIP. CIP revises it annually and says it is based on the latest scientific and industrial research. To maintain active certifications, organizations must continuously adapt to new requirements.

What’s in the CarbonNeutral protocol?

The protocol has five steps: definition, measurement, target setting, emissions reduction, and communication. 

First, companies decide what to certify: A specific product? An activity, like flights or hotel stays? Or an entity, like an entire organization or an office building? 

Next, a third-party assessment expert measures emissions associated with whatever is being certified using an international standard, such as the GHG Protocol Corporate Standard or the Climate Registry’s General Reporting Protocol. The calculation doesn’t just cover carbon. It accounts for all greenhouse gases recognized under the United Nations Framework on Climate Change, like methane and hydrofluorocarbons. (If the company measures emissions itself, CIP requires a third-party expert to check those calculations.)

Launched in 2002, the CarbonNeutral certificate is one of the oldest frameworks of its kind.

Third, companies choose an emission reduction strategy from a few options, including the Science Based Targets initiative, which helps companies reduce emissions in line with the Paris Agreement. They are also encouraged to join the Race to Zero, a coalition of companies and other entities working to reach net-zero emissions by 2050.

An important caveat: until recently, only companies with annual footprints over a certain threshold had to choose a reduction strategy—though that threshold has been cut from the 2024 update to the protocol.  

Next, companies that commit to actual emission reductions must follow through, using strategies like switching to renewable energy or electric vehicles. Whatever emissions remain unabated are offset via carbon credits.

Finally, CIP grants the company license to use a CarbonNeutral certification logo.

Green or greenwashing?

Unfortunately, a few companies with the CarbonNeutral certificate have been linked to greenwashing. In addition, carbon offsets—a key component of carbon-neutral claims—are famously unregulated. One 2023 study of almost 300 carbon offset projects found major shortcomings in the projects’ claims, including delayed emissions, rather than actual reductions, and over-crediting. Last year, the European Union banned offset-based claims that a company or product has a neutral impact on the environment. And one carbon credit provider, the Switzerland-based company myclimate, stopped offering a “carbon-neutral” label entirely, saying that offsets can’t credibly prop up climate-neutral claims.

Kate Ervine, an expert on global carbon markets and offsets at Saint Mary’s University in Halifax, says many companies’ carbon-neutral claims lack transparency, credibility, and integrity. She points to the 2023 Corporate Climate Responsibility Monitor, which assessed 24 companies’ climate pledges and found that only five had committed to “deep decarbonization.”

More fundamentally, though, critics—including Ervine, The Guardian editorial board, and Greenpeace—charge that offsets are a means for companies to continue polluting, rather than making sacrifices that reduce emissions.

CIP has quality control measures, but Ervine pointed to potential concerns with CIP offsets. For example, Guardian research into Verra, a certification body that verifies CIP offset projects, found that over 90% of Verra’s rainforest offset credits do not represent genuine carbon reductions because they didn’t meaningfully reduce deforestation. Verra has contested this claim.

Additionally, a CIP carbon-offset project gives families in countries like Bangladesh and Kenya efficient gas stoves to replace smokier wood- or charcoal-burning ones that account for roughly 2% of annual global greenhouse emissions. However, a 2023 study in Nature examined 40% of “clean cooking” credits on the market and found their impact was over-credited by about nine times.

It’s worth noting that CIP—like many carbon-neutral certification organizations—sells carbon credits. That could make for a conflict of interest, according to authors Vanessa Rauland and Peter Newman in their 2015 book Decarbonising Cities. Here’s their logic: when carbon-neutral certification companies sell offsets, they have less incentive to push companies toward rigorous emission reductions because that’ll hamper potential sales. 

CIP could also improve its transparency. It publishes a white paper of certified products, but that hasn’t been updated for almost three years. Its website also doesn’t identify what companies have certification—instead, it offers examples of companies “benefitting from credible climate action.” One of these, Microsoft, has claimed to be carbon neutral since 2012, but the Corporate Climate Responsibility Monitor published by the NewClimate Institute, a German think tank, says that claim is misleading: it only applied to 7% of Microsoft’s emissions in 2019.

In fact, Microsoft is an example of how carbon-neutral certificates can give companies the marketing boost and credibility associated with eco-friendliness while they sidestep serious emission reduction measures. Microsoft committed to a 30% reduction in its 2007 carbon emissions by 2012, but when the company wasn’t on track, it sought CarbonNeutral certification to protect its reputation, explains Frances Bowen, a researcher who studies corporate environmental strategy at Queen Mary University of London, in a 2017 paper. Upon request for comment, a Microsoft representative wrote, “Microsoft has nothing to share at this time.” 

In an email to Asparagus, a CIP representative said emission reductions take time and offsets permit companies to take responsibility for emissions immediately. “Companies that offset emissions put a price of carbon into their business, driving greater internal reductions,” the CIP representative wrote, citing research from Sylvera, Ecosystem Marketplace and Trov that companies using carbon credits reduce emissions more than companies that don’t. The email also said the voluntary carbon market is constantly evolving, and Verra’s methodology has recently been updated. As for Asparagus’ criticisms of CIP’s transparency, CIP wrote, “We are led by our clients and their decisions whether to talk publicly about their climate action.”

People often ask Ervine of Saint Mary’s University which climate certifications she recommends. “My recommendation would actually be that we want to be wary of certifications,” she says. She believes it’s more helpful to ask ourselves whether we actually need a product or to support organizations doing meaningful climate work. 

As for companies, she says, rather than claiming carbon neutrality and relying on questionable offsets, it might be more helpful to be honest about emissions.

Buzzword Summary

Offset-based carbon neutrality remains questionable and seems more helpful for marketing than the climate.

Asparagus depends on readers.

Support our work by subscribing, donating, or buying sustainable swag.