What Brands Need to Know About The Climate Label

And How Emerger Strategies Can Guide Your Brand to Certification

In today’s marketplace, sustainability certifications are becoming more critical for brands aiming to demonstrate their social & environmental commitment and meet the increasing number of sustainability-related regulations, demand from retailers, as well as the growing consumer demand for transparency. As a result, The Change Climate Project has launched its latest certification, The Climate Label which replaces The Climate Neutral Certified label. Here’s what your brand needs to know about this new certification and how Emerger Strategies can help your achieve The Climate Label certification.

What is The Climate Label?

The Climate Label is a certification designed to help brands showcase their efforts to mitigate climate change. Developed by The Change Climate Project, the The Climate Label certification evaluates a company’s carbon footprint, reduction efforts, and overall climate strategy, and in order to get certified, brands must:

• Create a Climate Transition Budget (CTB) at $15/tonne.
  • CTB = Total annual GHG Emissions x $15 per tonne
• Once a CTB has been set, brands will need to allocate 10% to value chain abatement (VCA) + a variable amount (%) to beyond value chain (BVC) + 15% maximum to other contributions:
  • CTB = 10% minimum to VCA projects + Variable amount to BVC projects + 15% maximum to Other Contributions

The goal is to provide consumers with a clear and credible signal that the brand is taking meaningful action to address its greenhouse gas (GHG) emissions by investing in GHG reductions.

Key Criteria for Certification

To earn The Climate Label, brands must measure their Scopes 1, 2 & 3 GHG emissions, set a Climate Transition Budget and fund qualifying projects, build and implement climate transition plans to reduce harmful GHG emissions, and report data and actions transparently. Here’s a more detailed list of how to get certified for The Climate Label:

1. GHG Emissions Accounting: Companies must measure and disclose their Scope 1, 2, and Scope 3 (3.1-3.7 + 3.9) emissions in accordance with the GHG Protocol.
2. Reduction Goals: Brands need to set science-based targets to reduce emissions in alignment with the Paris Agreement’s 1.5°C pathway.
3. NEW! Climate Transition Budget (CTB): Brands must set a CTB, and the CTB requires a $15/ton carbon fee for all emissions, with a minimum of 10% and a maximum of 15% allocated to value chain abatement (VCA) projects. Having that budget for a climate transition projects allows you to do more effective planning, to compare different project options.
   • For example, let’s say your Scopes 1-3 ghg emissions is 1,200 mtCO2e, then your CTB is $18,000.
4. NEW! Value Chain Abatement (VCA): VCA are projects within a company’s direct operations or supply chain undertaken to reduce GHG emissions. This includes materials and manufacturing, energy procurement, and efficiency improvements. Documentation for VCA investments must include signed contracts, invoices, and emission factor comparisons.
   • Using the same CTB example, you would need to allocate 10-15% of your CTB to VCA. Let’s say you decide to allocate 10% to VCA, then $1,800 would be allocated to value chain abatement. In this example, your brand could use $1,800 to purchase LED lights for your office, which would reduce your GHG emissions in your direct operations, and also reduce costs.
5. NEW! Beyond Value Chain (BVC): Projects that support the global transition to net zero outside of a company’s operations and supply chain, often accessed a financial purchase or investment in a market-traded instrument.
   • For example, carbon credits (nature-based avoidance and removals), Energy Attribute Credits (RECs), or Zero-emission transport credits. Continuing with the same example, the CTB is $18,000. We have allocated 10% to VCA, and will allocate 75% to BVC which = $13,500 to purchasing a mix of carbon credits, RECs or PPAs, and zero emission transportation credits.
     • The Integrity Council for the Voluntary Carbon Market (ICVCM) is currently assessing all available project methodologies for adherence to ICVCM’s Core Carbon Principles (CCP), the leading framework for quality & integrity in the VCM. All carbon credits will need to be Core Carbon Principles (CCP)-approved to achieve The Climate Label certification.
6. NEW! Other Contributions: Projects that build capacity and/or enable systems-change within companies and across the broader market, to accelerate the just global transition to net zero. Other contributions include: Planning, Research & Development (net-zero consulting services, GHG accounting/LCA software), Market Transformation Initiatives (OIA Climate Action Corps or Climate Changemakers), and Capital for the Net-Zero Transition (SEACEF).
   • Continuing with the same example, the CTB is $18,000, and we have allocated 10% to VCA, 75% to BVC, and will allocate 15% ($2,700) to Other Contributions, such as hiring Emerger Strategies to measure your GHG emissions.
7. Transparency: Companies must publicly report their progress, ensuring accountability.
8. Verification: All data and claims must be independently verified to meet the rigorous standards of The Change Climate Project depending on size of the company.

Table 1: The Climate Label Brand Example:

Benefits of Certification

• Consumer Trust: With sustainability now a key factor in purchasing decisions, The Climate Label can enhance your brand’s reputation and strengthen consumer loyalty.
• Competitive Edge: As a relatively new certification, The Climate Label offers early adopters the opportunity to stand out in a crowded market.
• Risk Mitigation: By committing to measurable climate action, your company can proactively address regulatory and stakeholder pressures.

Challenges to Consider

While The Climate Label offers significant benefits, achieving certification requires investment and organizational commitment. Brands must:

• Develop robust data collection and reporting systems.
• Allocate human and financial resources to implement emission reduction projects.
• Align internal stakeholders to prioritize climate initiatives.

How to Get Started

If your brand is ready to take the next step in its sustainability journey, Emerger Strategies can help you by:

1. Measuring Your Carbon Footprint: Work with Emerger Strategies to conduct a comprehensive GHG inventory to understand your current scopes 1-3 emissions.
2. Setting Goals: Work with Emerger Strategies to establish realistic, science-based targets.
3. Climate Action Plan: Work with Emerger Strategies to create a Climate Action Plan that will provide a clear pathway for achieving your GHG emissions reduction targets.
4. Engaging Stakeholders: Educate your team and supply chain partners on the importance of climate action, and
5. Applying for Certification: Emerger Strategies is a member of The Change Climate Project’s Service Provider Network, so should you need assistance in measuring, reducing, and compensating for your company’s GHG emissions, please contact us today!

Final Thoughts

As consumers, investors, and retailers increasingly prioritize sustainability, certifications like The Climate Label are becoming essential tools for brands. By committing to credible and transparent climate action, your company can not only contribute to the fight against climate change but also position itself as a leader in responsible business practices.

For more information about how to achieve certifications like The Climate Label, or for guidance on building a comprehensive sustainability strategy, contact Emerger Strategies today.