Climate Neutral Methodology

Want to dig a little depper into out process? This is the place for you.

01 Measure

Brands seeking certification in 2020 are required to count their calendar year emissions from 2019. Our requirement is based on the widely recognized Greenhouse Gas Protocol and includes all of Scope 1 emissions, all of Scope 2 emissions, and eight out of the 15 categories of Scope 3 emissions, as shown below.

scope 1
Direct Brand Emissions
  • Fossil fuels used at your facilities
  • Fuel consumed by your vehicles
scope 2
Indirect Brand Emissions
  • Electricity used at your facilities
  • Steam bought and used at your facilities
scope 3
Supply Chain Emissions
  • 3.1Purchased goods and services
  • 3.2Capitol goods
  • 3.3Upstream emissions from fuel and energy
  • 3.4Upstream transportation and distribution
  • 3.5Waste from operations
  • 3.6Business travel
  • 3.7Employee commuting
  • 3.9Downstream transportation and distribution
Supply Chain Emissions
  • 3.8Upstream leased assets
  • 3.10Processing of sold products
  • 3.11Use of sold products
  • 3.12End-of-life treatment of sold products
  • 3.13Downstream leased assets
  • 3.14Franchises
  • 3.15Investments

Table 1.1

How you estimate your carbon footprint depends on your annual revenues

While all GHG estimates must follow the boundaries defined in Table 1.1, how you estimate your footprint depends on your brand’s annual revenues.

Large Brands

2019 revenues above $100 mil

Large brands must hire a third-party consultant to verify their footprint calculation.

The underlying calculation can be based on the Climate Neutral Brand Emissions Estimator (BEE), a thirdparty calculator, or an internallybuilt tool, as long as it is based on the GHG Protocol standard and meets Climate Neutral boundary requirements

Large Brands

2019 revenues above $100 mil

Estimate your footprint using the Climate Neutral Brand Emissions Estimator (BEE). A report from a recognized third-party carbon accounting firm can be used instead if it is based on the GHG Protocol standard and meets Climate Neutral boundary requirements.

Large Brands

2019 revenues above $100 mil

Small brands use an emissions estimate from Climate Neutral’s BEE based on sector, geography, and financial data (revenues and costs)

Table 1.2

Counting Renewable Energy Purchases

Appropriate power purchase agreements (PPAs), renewable energy certificates (RECs), and guarantees of origin (GOs) may be used to reduce the total footprint of your electricity consumption. If there is a question about the eligibility of these instruments in the case of your footprint, Climate Neutral will reference the GHG Protocol guidance.

Verification Requirements for Greenhouse Gas Footprint Estimates

For small brands, some basic operational data and a letter of attestation are all that is needed. For medium and large brands, once GHG footprint estimates have been completed, Climate Neutral staff will review your documentation to verify results. Here is the documentation we require:

  • A final calculation of your total Scope 1-3 emissions, reported in tCO2e and broken down by GHG Protocol categories
  • If you used the BEE: the .csv export of your data
  • If you used your own model: a description of your estimation methodology and a report including the sources of your GHG emission factors as well as operational data used to make your calculations
  • If required: a report from a third-party verification firm

02 Offset

Carbon Credit Eligibility Criteria

Once you successfully estimate your brand-level emissions and adjust them for any PPAs, RECs, and/or GOs, you must purchase at least as many carbon credits as the total remaining footprint amount. All carbon credits must meet the following criteria:

Table 2.1

Tier
Max Allocation
Project Type
Tier 0 (Banned)
Tier 0 (Banned)
Max Allocation
0%
Project Type
  • Large Hydro (>20MW)
  • HFC-23 Destruction
  • N2O destruction
Tier 1
Tier 1
Max Allocation
30%
Project Type
  • Renewable Energy
Tier 2
Tier 2
Max Allocation
70%
Project Type
  • Energy Efficiency
  • Waste
  • Transportation
  • Chemical Processes / Industrial Manufacturing
Tier 3
Tier 3
Max Allocation
100%
Project Type
  • Avoided deforestation
  • Tree planting
  • Cookstoves
  • Agriculture
  • Water filtration
  • Small hydro (
  • Landfill methane

Third-party Verification

Carbon credits must be verified through one of the following standards: Gold Standard, Verified Carbon Standard, Climate Action Reserve, American Carbon Registry, Clean Development Mechanism.

Requirements for Procuring and Documenting Carbon Credit and Renewable Energy Purchases

All small brands must purchase carbon credits using Climate Neutral’s pooled procurement. Medium and large brands have the option to use Climate Neutral’s pooled procurement or purchase a qualifying portfolio on their own. Brands purchasing carbon credits on their own must provide a single signed .pdf file that contains the following information for all credits purchased:

Table 2.2

Name & type of project

e.g. Honduras Hydro

Project Type

Small Hydro

# of credits purchased

30,000

Vintage Year Credits

2017

Verification standard

VCS

In addition, you must provide the following for each batch of carbon credits you purchase:

A. Registry report (via hyperlink or screenshot) showing carbon credits retired on your behalf (preferred), plus a report of the average price paid per credit

OR

B. Fully executed purchase contract, payment receipt for credits purchased, and a letter attesting that they were retired on your behalf.

Brands who have purchased renewable energy to reduce emissions from electricity usage (“market-based” Scope 2 emission reductions)
must provide the following information: In addition, you must provide all relevant contracts, attestation documents, certificates, and payment receipts associated with your renewable energy purchase.

Type of contractual instrument

e.g. Renewable Energy Certificate (REC)

Amount of renewable electricity purchased

5,000 MWh

Country where renewable energy was generated

United States

Table 2.3

Reduce

Emission Reduction Activities Within Corporate Boundaries

All brands are required to create a Reduction Action Plan using the Climate Neutral template that shows they are working on internal emission reductions. Action plans must include a minimum of two measures that will reduce emissions within corporate boundaries within the next 12-24 months. For renewal certifications, reduction plans must include reports on progress made against actions included in the prior year’s plan.

A glass bottle with a Climate Neutral Certified tag.

Time to label

Following the successful completion of Steps 1, 2, and 3, our team will ask you to sign a Brand License Agreement, and then provide written confirmation that you are a certified company. Then you will be able to begin using the Climate Neutral Certified label in your marketing, following our btand guidelines.

To maintain Clinate Neutral Certified status, you must complete Steps 1, 2, and 3 annually.

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