Brands were quick to adopt carbon neutral claims but interest has slowed of late as consumers and companies are left confused, says Maria Coronado Robles.
Carbon offsets have a bunch of advantages that companies really like. They’re a quick and cost-effective way to offset their carbon footprint with the subsequent positive PR of claiming carbon neutrality. What’s more, they fit right into short-term business plans without needing to shake up production or operations to tackle more difficult to abate greenhouse gas emissions (think scope 3 emissions). It’s no surprise, then, that our global data show an 87.8% increase in staple grocery foods using ‘carbon neutral’ and ‘reduced carbon’ claims in the past two years; in dairy products there has been a 79.4% jump.
But carbon neutral claims and the voluntary carbon market are under fire. Critics see them as a shortcut to ‘out-green’ the competition, and attract a premium price. Food companies have certainly found the temptation hard to ignore and our research suggests this has led to a dangerous disconnect.
In a recent survey we conducted, about one-third of food and retail professionals said their companies are using carbon offsets. That’s double the number that said their company has a net-zero strategy in place – which means that twice as many companies are using offsets as a patchwork solution rather than actually mapping out a strategy to become net-zero. It raises some eyebrows and begs the question: what positive changes have carbon neutrality and offsets driven?
Those in the voluntary carbon market, certifiers of carbon neutral and the companies making claims, are desperately looking for answers. Meanwhile, it’s important not to demonise all such claims and offsets as greenwashing.
The idea of carbon neutrality and offsets has sparked important conversations that we weren’t having before. Businesses are now much more aware of their carbon footprints than they used to be, and even if some are using offsets as a quick fix, at least they’re having to measure, track, and acknowledge their emissions in the first place. Many more certainly need to do so.
Consumers are also becoming more informed and thoughtful about their choices. Initiatives like carbon labelling and carbon-based prices have certainly provided some of the information that all the surveys tell us consumers want about the sustainability of the food and drink they buy.
Mindful of the gap
When it comes to actual purchases, carbon neutral products lag behind other sustainable options. Only 17% of the 40,000 shoppers in our global survey said they had purchased a carbon neutral product recently; this compared to 33% who had chosen items marketed with ‘sustainable packaging’. We also found a disconnect: 64% of people said they’re concerned about climate change, and 44% even think they’re part of the problem; however just 17% are actually buying carbon neutral products. That’s a big gap.
Part of the problem here is that people might not fully understand what carbon neutral means (research by the Advertising Standards Authority in the UK highlighted this confusion). Or perhaps they’re sceptical about the difference that buying these products really makes. Then there’s the ever-present issue of accessibility and affordability: 44% of global consumers consider the ‘high price relative to non-sustainable alternatives’ as the top barrier to buying these products, with ‘unclear labelling’ closely behind. So there’s a mix of educational and practical barriers that might be holding people back from aligning their purchases with their concerns.
So what happens next? Has scrutiny of the claims, by campaigners, consumers, regulators and companies themselves, derailed interest in carbon neutral claims forever?
Brands are genuinely worried about being labelled as ‘greenwashers’, so with offsets under scrutiny companies are compelled to put the brakes on. Evian and Nestlé are among those to be re-thinking their strategies, while Footprint has reported how foodservice companies like Leon, Sodexo and others are moving away from carbon neutral claims and targets. The Carbon Trust has also dropped its carbon neutral label used on almost 900 food and drink products, with the focus now on schemes and labels showing carbon reductions or comparisons between products.
Carbon offsets are not a magic solution; we have seen in recent weeks how putting too much weight on them can actually backfire. In our research, we’re spotting a slight slow down in the use of carbon neutral claims in food and even a decline in areas like staple foods and cooking ingredients and meals. However, it hasn’t yet permeated industries such as beauty and personal care where the number of these claims continues to grow. It was also interesting to see carbon neutral claims made by Apple for some of its new products last month – and the criticism it is already receiving for this.
Rise to reductions
So, are companies better off focusing on emissions reductions? In a word: yes. The most climate neutral emissions are the ones you never produce in the first place. Companies are throwing money at different projects with all sorts of certifications to claim to be neutral – which sounds great (or used to sound great) – but it is hard to know which ones actually make a real impact or even know where these projects are happening or if they are affecting communities, food security or land prices. If companies are struggling to understand all this, how on earth are consumers supposed to?
Regulators like the Competition and Markets Authority and ASA are of course hoping to tighten up the rules so shoppers can better understand what they are buying and then clarify any green claims being made. The intention is good – demands on companies to make it clear what and how many offsets are used can help to improve transparency, for instance. The new rules are also shaking up how companies talk about sustainability, including carbon, net-zero and carbon neutral.
But the guidelines are frustratingly vague and leave room for interpretation. There is still too much uncertainty and above all companies want consumers to trust the brands they buy into. Whether they can do so when it comes to carbon neutral claims going forward, time will tell.
Maria Coronado Robles is global head of sustainability insights at Euromonitor.
