There are two areas that contribute to the total costs associated with certification — measurement and offsets. We aim to provide more insight below about what these costs cover and how they are calculated.
Measurement
Your carbon inventory was calculated using a measurement methodology called ‘economic input/output modeling.’ The model we use specifically is Exiobase, which is developed through a consortium of European universities, governments and other institutes. Exiobase is derived from the study of macro-economic trends. We know how, nation by nation, industries spend money. From this insight, we can produce a carbon inventory using life cycle analyses that study how spending on certain products correlates to emissions.
You supplied us with information about how much you spent, what you do and where you operate. These were the inputs to the economic input/output model. Of course, the output of the model is an estimate. You don’t necessarily spend money in ways that are consistent to your industry on average.
We apply a 15% markup to your estimated emissions as an assurance measure. We are confident that the estimate plus this assurance factor covers your real carbon emissions. Not only is this well-accepted in the application of input/output methodology, but we have observed in our own analyses that assured estimates amply cover real carbon emissions. Therefore, we can confidently certify you based on this number.
We do not allow for more detailed footprint analysis in our standard small business program. We do this so that we can work to certify as many brands as possible, in a simple and streamlined process that leads to the greatest climate impact.
As a reminder, Climate Neutral offers software to do more detailed carbon emissions measurement and analysis. This software is called the Brand Emissions Estimator (BEE) and the paid version of the software allows you to edit your estimate by providing real data from your operations. If you feel strongly that a more precise estimate of your emissions is required, you can purchase the BEE and certify in our next cycle. The cost of a BEE license is $2,000.
Climate Neutral cannot accept outside measurement solutions for the small business program – this may include your own calculations done in-house, reports done by consultants, or reports from other software tools.
If you are a recertifying brand (thank you for your continued commitment!) and are wondering why your emissions are higher than last year, here are some explanations:
Your business grew! Congratulations - this is good news :) However, emissions increase directly proportional to the growth of your business, specifically spending. Remember that revenue often lags spending, so you should look at spend growth, not sales growth.
You chose a different industry last year. This will affect your emissions in a potentially significant way.
You refined your footprint using the BEE last year. Again, this option is no longer a part of the standard small business offering. We understand that you may want to engage with the increased detail offered by the full BEE and we’d encourage you to consider the licensed option.
Also remember, the increase in your invoice could be due to an increase in carbon credit prices, and not your emissions – read on for more on that!
We’d ask that you reference your report from last year to try to interrogate the differences you’re seeing before reaching out to our team. However, you are welcome to contact us if you continue to have questions on this.
Offsets
In the past few months, demand for carbon credits in the voluntary carbon market has increased significantly as companies around the world (like yours!) look to offsets as a first step in their climate strategy. Increased demand coupled with limited supply has driven prices up over the last 6 months. We are confident that we can offer a Climate Neutral Pool in the range of $10-15 per tonne, and will continue to update our brands as our understanding of the market changes.
Although it may not feel like it, these higher prices are actually a good thing from a climate perspective! It signals to project developers that more decarbonization is economically in demand, and results in greater investment in real projects that avoid or remove carbon emissions. We’re at a pivotal moment for climate change, and while carbon reductions are essential, many companies are severely limited in how much they can reduce emissions because they depend on complex supply chains. Therefore carbon credits are the best alternative for immediate impact and a tangible way to contribute to climate change mitigation.
Value of Certification
Finally, it’s important to remember that going through the certification process is not only a cost; it also delivers significant value to your brand. Companies are seeing sales uplift from sustainability and climate marketing from a notable increase in consumer interest in sustainability. Here’s a recent IBM report that shows a preference for sustainability holding up across age groups, and these examples here and here summarize survey data that suggests people are interested in climate change, not just sustainability.
We believe the Climate Neutral Certified Label offers a unique marketing vehicle to convey your climate commitment. It’s a clear symbol for consumers — actionable, approachable, increasingly recognized — and we hope you'll decide to join our community of brands leading on climate.