The Climate Neutral Certified Standard

Entities seeking certification in 2023 are required to count their full calendar year cradle-to-customer emissions from 2022. This includes emissions related to all products, services, and business activities. Fiscal year data can be used as long as six or more months overlap with calendar year 2022. Measurement boundaries are based on the Greenhouse Gas Protocol and include all of Scope 1 emissions, all of Scope 2 emissions, and 8 out of the 15 categories of Scope 3 emissions, as shown below.

B. Data Requirements

Use of verifiable activity data vs. estimated data: Certifying entities are strongly encouraged to provide actual metered or billed data, rather than modeled estimates, for Scopes 1 & 2. 

Use of activity data: Certifying entities are strongly encouraged to use activity data or physical data for emissions Scopes & Categories where emissions are equal to or more than 5% of the total footprint. Companies with science-aligned reduction targets are required to use activity data or physical data (i.e. kWh, not dollars spent on electricity) for Scopes 1 & 2 starting in their second annual certification cycle.

C. GHG Measurement and Verification Requirements

While all GHG estimates must follow the boundaries defined in Table 1, how you estimate your footprint depends on your annual revenues.

Once GHG inventory has been completed, Climate Neutral staff will review your submission and evaluate it for compliance with the Standard.

D. Requirements for Third-Party Verifiers

Third-party verifiers (e.g. environmental auditors or consultants) must be able to demonstrate the following:

• At least five years of corporate history working in carbon accounting and/or lifecycle analysis at product and company levels, with at least 25 documented client engagements involving corporate or product level footprints.
• At least five years of corporate history auditing and/or verifying corporate GHG footprints of companies with over $100 million in annual revenue.
• Ability to demonstrate independent control and ownership from the company under review to avoid any conflicts of interest.
• Ability to act as an unbiased third party in the verification process.
• At least five years of corporate history with one or more of the third-party verification standards referenced in Table 3  (e.g. ISO 14064-3).

All verification reports should follow these five common principles of carbon footprint verification: relevance, completeness, consistency, transparency, and accuracy. Verification reports must specify the level of assurance provided by the report as either limited or reasonable. 

E. Counting Renewable Energy Purchases

Power purchase agreements (PPAs), renewable energy certificates (RECs), and guarantees of origin (GOs) may be used to make “market-based” adjustments to the total emissions from your electricity consumption. 

Climate Neutral requires that vintages of any energy attribute certificates used for compliance fall within the three years up to and including the certification year.  For example, when considering 2022 Scope 2 emissions, you must purchase RECS or GOs with a vintage of 2020 or later. All RECs and GOs used for compliance must also take place on the same grid as your Scope 2 electricity consumption.

If there is a question about the eligibility of renewable energy instruments in the case of your pending certification, Climate Neutral will reference the GHG Protocol guidance.

A. Target Setting Requirements: 

Certifying entities are required to create a Reduction Action Plan using Climate Neutral’s template that shows progress toward reducing emissions from products and services. Action plans must include a minimum of two measures that will reduce emissions within the next 12-24 months. If a certifying entity has annual revenues over $5 million, you must identify at least one reduction measure that applies to your Scope 3 emissions. To recertify, reduction plans must include reports on progress made toward prior years’ reduction actions.

If the certifying entity has over $100 million in annual revenues, you are required to create a science-aligned reduction target for 2030. This target applies to all emissions included in Table 1. The target can be a default target of 50% absolute reductions based on a 2022 emissions baseline, a 1.5 degree C-aligned target approved under the Science-based Targets initiative, or a well documented science-aligned target that is sector specific. Entities with less than $100 million in annual revenues are strongly encouraged to set 2030 science-aligned targets. 

B. Checkpoint Year Requirements:

Success toward reduction actions and science-aligned targets will be closely evaluated in Checkpoint Years set in 2025 and 2028. Certified entities will be required to evaluate and report on progress towards the following goals:

Checkpoint Year 2025 Goals: 

• All RAPs set through 2023 should be complete. 
• You should be roughly 50% toward completing 2030 target requirements, if applicable.*

Checkpoint Year 2028 Goals: 

• All RAPs established through 2026 should be complete.
• You should be roughly 80% toward completing 2030 target requirements, if applicable.*

*Failure to match exact Checkpoint Year 2030 reduction plan goals may be explained if you can demonstrate that you have significant pending reduction actions, or that you are following a separate but clear reduction plan with custom baseline or target years.

Certifying entities are required to compensate for all emissions measured according to the Standard (all product, services, and operations) with investments beyond the value chain. Carbon inventories may be adjusted with clean energy purchases made via PPAs, RECs, and/or GOs. All forms of compensation must meet the following criteria:‍

a. Third-party Verification‍

Carbon credits must be verified according to one of the following standards: Gold Standard, Verified Carbon Standard, Climate Action Reserve, or American Carbon Registry.‍

b. Vintage Year Restriction

With the exception of forestry and land-use, all carbon credits must represent avoided emissions or removals from within the four years up to and including the emissions year. For companies getting certified in 2023 for a 2022 emissions footprint, this includes any vintage year from 2019 through 2022. For forestry and land-use projects, all credits must represent emission reductions from within the seven years up to and including the emissions year, which includes any vintage year from 2016 through 2022. There are no requirements for project start dates as long as the credits meet the vintage year requirement. 

c. Portfolio Requirements

Climate Neutral will track carbon credit purchases based on the project categories and types listed in Table 4. All carbon credit purchases must be from the approved project types in Table 4. You are required to report on the Project Category for all credits purchased. You are also encouraged, but not required, to follow the Suggested Portfolio Allocation Targets. 

Climate Neutral requires that companies with active certifications publicly disclose the following information on the Brand Profile Directory on the Climate Neutral website:

1. Total annual GHG footprints calculated broken down by Scope 1, 2, and 3 emissions for medium and large entities) 
2. Total annual investment (in USD) in carbon removal and avoidance credits as well as the project types supported 
3. Categories of certified products and/or services
4. Summary of reduction action plans 
5. Progress toward past reduction action plans
   

In certain cases, Climate Neutral may, in its sole discretion, allow alternative disclosure formats for the Brand Profile Directory, upon request from certified companies.

Certified entities are strongly encouraged to engage in lobbying, education and stakeholder (e.g. customer, supplier, employee) mobilization efforts in support of climate solutions. Applications for re-certification will include a requirement to report on such activities completed in the prior calendar year. This reporting will not be made public, but should generally include one or more of the following activities:

1. Climate Lobbying: Support climate policy at any political level directly or in collaboration with an advocacy or trade organization. 
2. Internal Climate Literacy: Engage your team in the Climate Neutral Certification process and conduct education sessions to increase staff understanding of climate issues.
3. Consumer Climate Literacy: Engage consumers in the Climate Neutral Certification process and importance of climate action.

Climate Neutral reviews and updates this Standard annually through an in-depth stakeholder review process. For significant year-to-year changes to the Standard, Climate Neutral may specify a transition period to allow re-certifying entities more time to comply with the revised requirements. The length of the transition period for a given change (if any) will be defined during the annual review process.

All entities certifying for the first time must comply with the version of the Climate Neutral Standard for the applicable certification year. 

Transition periods will not apply to changes in the requirements for purchasing emission reduction or removal credits / offsets. Certifying entities with pre-existing multi-year offtake agreements that do not conform to the Standard will be considered on a case-by-case basis.