South Pole launches new label for verified climate claims
Global consultancy South Pole has launched a new labelling system to help firms verify their climate claims. Appearing on the products of successful applicants, the Funding Climate Action claim will help companies show to consumers that they are covering their emissions by investing in climate technology.
Environmental, social and governance (ESG) centricity is playing an increasingly important part in economic and wider societal debates. With investors increasingly keen not to be caught out by backing companies that do not take environmental risks seriously, most companies have now come to the realisation and understanding that proactively improving upon ESG issues is tied to healthy business outcomes. However, distinguishing which firms are taking decent climate action from those who do not treat it as a priority is slowing progress.
A number of European firms simply do not understand how to measure their emissions data in a way that can meaningfully monitor their progress on climate pledges. Meanwhile, others seem simply to be lowballing their pledges in a bid to look like they are doing something – without actually delivering changes that count for anything. This flood of greenwashing is increasingly making it difficult for consumers to reward firms earnestly making an effort, with any kind of confidence. To help fill this, a growing number of independent verification markers are being launched to try and point consumers in the right direction, when voting with their wallet.
Headquartered in Zurich, South Pole is a global consulting firm which develops and implements emission reduction projects and strategies for companies, governments and organisations around the world. Since its launch in 2006, the firm has spread to 42 locations across six continents – ironically the only one it has no presence on is Antarctica itself – and as demand for sustainability consulting is on the rise, it is looking to expand its offering across those locales.
The latest offering from South Pole to that end is a new service to provide companies with a transparent pathway to demonstrate their green credentials. With increased scrutiny on carbon neutral claims, companies are under pressure to verify the validity of their climate goals. Without being able to transparently prove the green credentials behind their claims, companies run the risk of being accused of ‘greenwashing’, while customers may divest from their products.
Joining the likes of B Corp certification and CDP’s science-based-targets verification system, the Funding Climate Action (FCA) initiative is the latest corporate marking to enable companies to get independently verified, and show that their products meet with key sustainability guidelines. They can then print the FCA’s related logo on their labelling.
According to a release from South Pole, the label is a “marker of quality that illustrates an organisation is taking responsibility for its emissions”, as well as showing that firms have been through comprehensive process to ensure their climate action is credible. To renew the label, companies must maintain regular communication of their sustainability visions and achievements, which the FCA then reviews on an annual basis.
Renat Heuberger, South Pole's CEO, said, “The private sector must take responsibility for their emissions and keep investing in climate action – that is non-negotiable. For this to be well-received by company stakeholders, they need a claim that transparently shows exactly what their contribution is. The FCA claim, backed by a label with a verifiable process, does exactly that. It encourages radical transparency and accountability at a time when all eyes are watching whether corporates are engaged in greenwashing."
Mark of quality
The FCA mark is a blue penguin silhouette, underscored by text which reads ‘this product funds climate action’. This will help assure consumers that the companies behind products they are investing in are covering carbon emissions targets, by in turn investing a portion of their income in verified climate change mitigation contributions.
According to consumer research by South Pole, the FCA is already winning the confidence of consumers, suggesting that partnering with the initiative will pay dividends for companies in all industries. Polling over 1,500 people in Europe and the US, the research found that 84% of participants were more likely to buy a product with South Pole’s ‘Funding Climate Action’ label, while 83% felt well-informed by the company’s bespoke climate action landing page – helping 78% to trust the appearance of the label as a signifier of credible climate action on the part of the firm whose product they are buying.
South Pole also undertook a consultation with more than 130 stakeholders, to determine how FCA would be received by businesses, climate policy experts and leading NGOs. That investigation found that 94% of respondents supported the need for corporate claims to be compatible with the Paris Agreement – and 69% being supportive of the FCA as a means to do so. This buy-in is illustrated by a number of academic sources, including Oxford Net Zero, having reportedly praised South Pole for its inclusivity in initial discussions about forging a new landscape for corporate climate claims.
Kaya Axelsson, Net Zero Policy Engagement Fellow at the Smith School of Enterprise and the Environment, added, “This collaboration will result in a consolidated and simplified toolbox that empowers companies to effectively demonstrate how their efforts contribute to fulfilling national commitments and driving climate action forward."
