It's easy to tell if products are organic, Fair Trade certified, or made in America--they often bear a certification stamp to prove it. Why isn't there an equivalent for companies to disclose their impact on climate change

That was the thinking that prompted Peter Dering and Jonathan Cedar to create Climate Neutral, a nonprofit that certifies companies as having a net carbon footprint of zero. Launched on September 23, the company looks at everything from the raw materials businesses use to their supply chains to their office energy consumption. Forty-four companies have worked with Climate Neutral to become certified as carbon-neutral in 2020, including drinkware maker Klean Kanteen and sneaker company Allbirds.

Dering and Cedar are both founders who continue to run their own for-profit businesses. Dering founded San Francisco-based backpack and camera equipment maker Peak Design in 2011, while Cedar founded the outdoor equipment company BioLite in 2012. The Brooklyn-based startup makes products that sustainably produce light, heat, and energy, and has been offsetting all of its emissions dating back to its founding, at a cost of less than $20,000 annually.

A former engineer, Dering has always been fascinated with energy and sustainability, but only recently decided to get involved with what he calls "the carbon cycle." During a visit to Peak's manufacturing plant in Vietnam last year, he was shocked by how much foam, packaging, aluminum, and other materials went into creating and shipping the company's products. He hired a consultancy to tally the company's carbon footprint and found that Peak, which generated $30 million in revenue in 2017, could offset that year's entire carbon footprint for just $60,000. Most of that would be done by purchasing offsets--essentially a way of paying for the prevention of an equivalent amount of carbon from entering the atmosphere, through projects like the development of wind farms, forest restoration, or methane gas capture.

In the coming months, Climate Neutral will roll out an online emissions calculator. Companies will input information such as how much they spend on each of their raw materials, the energy costs at their facilities, the amount of travel employees do, and how and where their products are shipped. The companies will identify where they can become greener, make reductions where possible, and purchase offsets for the rest. Even for companies that manufacture physical goods, the co-founders say, the annual cost will be 0.4 percent of the company's revenue or less, which can be rolled into the products' prices.

Once a company is certified as carbon-neutral, it can stick the Climate Neutral logo on its packaging, website, or hang tags, thus signaling its green status to consumers. "You hope that consumers start to understand it well enough," Dering says, "so that it becomes, 'Hey, wait a second--this company doesn't pay for their carbon. What the hell? I'm not buying that toothpaste.' That's the dream." 

It might not be far off. As reports from the U.N. highlight the increasing urgency to reduce greenhouse gas emissions, public awareness of the issue seems to be growing. A 2018 Nielsen survey found that 73 percent of consumers would alter their consumption habits to reduce their impact on the environment. 

Avocado Green Mattress went through the certification process earlier this year, calculating the emissions of its headquarters in New Jersey, raw material farms in India, and shipments to customers all across the United States. "It was rigorous," admits co-founder Mark Abrials, adding that, in the end, it was worthwhile. "This provides a straightforward way for companies to be part of the climate solution."

Carbon offsets, it's worth noting, aren't a perfect solution. From an environmental standpoint, the ideal scenario is to not put carbon into the atmosphere in the first place. To that end, before certifying a company, Climate Neutral requires that it undertake two new reduction efforts before paying for offsets. In Avocado's case, for example, the company is changing its distribution strategy to reduce shipping needs and diverting returned mattresses from landfills by donating them instead.

Climate Neutral isn't generating revenue yet, instead relying on funding from Peak Design and BioLite. In the future, Dering says, Climate Neutral could earn revenue by buying offsets in bulk at a discount and reselling them at a slightly higher price.

The co-founders hope to have 200 companies certified by the end of next year and 700 by the end of 2021. Some brands, Dering points out, have already declared themselves as carbon-neutral or vowed to get there soon. He hopes they can be persuaded to get Climate Neutral-certified in the process.

"It's on us," Dering says, "to convince those companies that joining up with us is going to add solidity to their claim. We're all going to speak much, much louder collectively."

Published on: Oct 11, 2019