Claiming Climate Benefits — Without the Greenwashing Risk

An increasing number of companies are making claims about their climate benefits. While Scope 1, 2, and 3 emissions accounting focuses on the negative impact organisations have on the climate, many are also seeking ways to communicate the positive climate aspects of their products and services.

At the same time, greenwashing risk is rising. From ASIC's crackdown to the Environmental Defenders Office's litigation against high-profile companies, many boards and executives are understandably hesitant to make positive climate claims.

But it is possible to claim climate benefits while minimising greenwashing risk - this article provides a basic framework for doing so.

There are several ways a company can make a positive contribution to climate mitigation. The first step is identifying which are relevant to your specific circumstances.

Some common options include:

• Reducing emissions relative to a baseline from a previous year
• Selling carbon neutral products or services
• Removing carbon from the atmosphere
• Avoiding emissions from the use of products or services sold
• Selling products/services with lower embodied emissions compared to competitors
• Enabling emissions reduction by investing in climate tech startups

One term I advise against using is "Scope 4 emissions", which is sometimes used to describe avoided emissions. This term lacks a consistent definition, is not recognised by major standards such as the Greenhouse Gas Protocol, and is increasingly seen as potentially misleading.

Don’t create your own methodology. While it may be tempting for innovative individuals, it lacks credibility — it’s like writing your own exam questions.

Instead, choose an established standard. There are often multiple options available for each use case.

Here are some recognised standards to consider (not exhaustive):

• Reduced emissions: Greenhouse Gas Protocol (GHGP) Corporate Standard, Science Based Targets initiative (SBTi), ISO 14064-1
• Carbon neutral: Climate Active, ISO 14068
• Carbon removal: ACCU, Gold Standard or Verra methodologies
• Avoided emissions: WBCSD Guidance on Avoided Emissions
• Lower embodied emissions: GHGP Product Standard, ISO 14040 & 14044
• Startup investment impact: Project Frame, GenZero Climate Impact Measurement Framework

The biggest risk when communicating climate benefits is leaving it solely to the marketing team. There’s often a subtle but significant difference between what sounds good and what is technically accurate.

Start by using the correct terminology — and resist the temptation to vary your language just to avoid repetition. The terms listed above are rarely interchangeable.

Then, get into the details. Most standards require disclosure of key elements such as calculation methods, assumptions and exclusions. The climate claim should clearly reference this supporting information, which should be prominently displayed or easy to access.

As a sustainability consultant, I say this with some bias — but it really is worth getting help from a qualified expert. This is a nuanced area, and mistakes can be costly.

There are three common forms of external support:

1. Assistance: Engaging a sustainability consultant to complete all or part of the work. This is particularly helpful when in-house capacity or expertise is limited.
2. Verification: A qualified third party reviews your approach and data for accuracy and alignment with recognised methodologies. It's a cost-effective way to increase confidence in your work.
3. Assurance: A formal evaluation by an independent expert of the robustness of your data and methods. This is more expensive but offers greater credibility, particularly for public or high-stakes claims.

There are two levels of assurance: Limited and Reasonable. Limited Assurance is most commonly used for voluntary claims and provides a moderate level of confidence. Reasonable Assurance involves more in-depth testing and provides a stronger, more definitive conclusion.

Companies can and should be recognised for their contributions to climate mitigation. With careful use of terminology, alignment with recognised standards, and appropriate expert support, it's possible to communicate climate benefits credibly and confidently — without falling into the greenwashing trap.