opinion | Companies struggle to justify their ‘carbon neutrality’

Through the Green Deal, the European Union aims for a goal of “carbon neutrality” (or “climate neutrality”) by 2050. This involves offsetting any greenhouse gas (GHG) emissions resulting from the activity by sequestering equivalent amounts of CO², in order to limit the level of carbon in the atmosphere in the long term and, consequently, global warming.

In recent times, France has introduced restrictive conditions for the use of “carbon neutrality” claims or formulations of equivalent meaning or scope, which may falsely suggest that the company’s activity or its products no longer have an impact in terms of GHG emissions.

The prohibition in principle of claims of “carbon neutrality”

The Environmental Code prohibits communication in an advertisement about a product’s “carbon neutrality” unless the company in question can demonstrate a real approach to limiting GHG emissions and offsetting unavoidable emissions ( C. env., art. L. 229-68 created by the Climate and Resilience law of August 2021).

The text implementing the ban on “carbon neutrality” claims was published in mid-April and will apply to all ads running from January 1, 2023 (Decree No. 2022-539 of April 13, 2022).

Following on from the advice on carbon neutrality issued in July 2021 by ADEME, France intends to demand positive action from companies to limit GHG emissions and will no longer accept carbon neutrality claims based solely on carbon offset systems. The objective, announced within the framework of parliamentary work on the Climate and Resilience law, is “to force companies to implement a true decarbonization project of their activities instead of seeking carbon credits from third parties at a lower cost” .

The degree to which the derogation conditions are required

This explains why the conditions to be met to lift the ban on “carbon neutral” claims are very demanding. Thus, during the entire period of marketing of the product, the company must easily make available to the public (through an internet link or a QR code on the packaging or advertising), a summary report describing, in particular, the carbon footprint of the product throughout of their entire life cycle and the approach through which GHG emissions are avoided (by priority) or reduced and, failing that, offset. The report must contain the targeted GHG emissions reduction trajectory, described using annual progress objectives quantified over a minimum period of 10 years.

The summary report must also be updated annually and the claim of neutrality cannot be maintained if emissions associated with the product before offsetting are found to have increased between two successive years.

ADEME recommendations on the use of the “carbon neutrality” argument

In February 2022, ADEME published recommendations for professionals, namely in communication and marketing, “who seek to enhance the commitments of their structure with a view to combating climate change”. It presents examples of formulations to be avoided (“zero carbon footprint”, “a product purchased, a tree planted” or referring to carbon offsetting in a generic way) and recommended formulations (claims accompanied by specific elements that allow assessing the scope the company’s approach to carbon neutrality).

A stricter position than the European position

For its part, in its recent proposal to revise Directive 2005/29/EC on unfair commercial practices, the Commission appears to state that “carbon neutral” or “climate neutral” claims, generic claims, could be accepted whether the information useful for a good understanding of its scope has been provided in clear and apparent terms in the same medium of the allegation.

While the Commission announces that it is considering a regulatory framework for carbon absorption certification, fundamental differences over whether companies can report their “carbon neutrality” when using only carbon offsetting could very soon undermine the free movement of products, a declaration validly used in the EU can no longer be accepted in France from January 2023.

Leave a Comment