Effective January 1, 2025, California’s AB 1305 introduces stricter transparency requirements for climate claims. The law mandates that companies publicly disclose details about their carbon credits and greenhouse gas (GHG) reduction efforts, ensuring greater accountability in corporate sustainability commitments.
Below, we provide an overview of AB 1305, its applicability, and recommendations for compliance.
Note: This is not legal advice. Please consult an attorney to determine if this law applies to your business.
Who Does AB 1305 Apply To?
AB 1305 applies to two main groups:
Companies making climate claims while conducting business in California.
Entities selling carbon credits (not the focus of this article).
Since our primary focus is on the first group, we will outline how the law applies to businesses making climate-related claims.
According to the State of California, AB 1305 applies to entities that:
Claim to have achieved net-zero emissions.
Assert that they, their affiliates, or their products are carbon neutral.
Make statements suggesting no net increase in carbon dioxide or GHG emissions (as described in Section 38505).
Claim to have significantly reduced carbon dioxide or GHG emissions.
Therefore, if your company makes any of these claims and does business in California—such as selling products online to California consumers—you may be subject to AB 1305.
This said, we strongly encourage consulting a lawyer to determine your obligations under AB 1305.
How Does This Affect Our Certification Program?
Our current understanding is:
Climate Neutral Certified falls explicitly under AB 1305.
Climate Label Certification is less clear but could still require compliance.
To ensure compliance, we recommend that certified entities create a simple webpage with the required disclosures outlined below.
What Needs to Be Disclosed?
AB 1305 requires companies to disclose:
Details about the climate claim (e.g., net-zero commitments, certification status).
Details about carbon credit purchases (if used to support claims).
Below, you can find more details about the required disclosures and some suggested language that you may want to include on a dedicated page on your website. Reminder: We recommend consulting a lawyer to determine whether this law applies to your business and to ensure full compliance with California regulations.
Part 1: Climate Claim Details
Required disclosures:
Overview of the claim (e.g., “Our company is Climate Neutral Certified”)
Third-party verification details (e.g., TCCP certification)*
Link to updates on emissions progress (e.g., sustainability report, brand profile page)
Sector-based emission reduction targets & methodologies (if applicable)
TCCP’s Suggestion:
We make claims about carbon reductions and our company’s path to net zero.
In 2025, these claims are based on our Climate Label Certification, and we disclose information about our past progress and future plans to reduce GHG emissions.These claims are verified by a third party, The Change Climate Project (TCCP), according to their Certification Standard. Further details are available at changeclimate.org/standards.
Our certification is renewed annually and requires us to provide updated GHG emissions data.
Our progress is documented in our annual sustainability report, available on our profile page: explore.changeclimate.org/brands/xyz.
[Include if applicable] Additionally, our company has set a sector-based emissions reduction target aligned with a 1.5°C pathway, following Science Based Targets initiative (SBTi) best practices.
Part 2: Carbon Credit Purchases
Required disclosures:
Names of supported carbon projects (including registry & project ID)
Type of offsets used (carbon removal, avoided emissions, or both)
Protocols used to calculate emissions reductions
Tip: Work with your carbon broker/provider or check project registries to obtain accurate project details.
TCCP’s Suggestion:
We purchase carbon credits to support climate projects as part of the climate actions that substantiate our climate claims.
These carbon credits include [Project 1, Project 2, Project 3].
For transparency, we disclose the following details for each project:
Name of offset seller, registry, and project ID
Project type & site location (including whether the credits are from carbon removal, avoided emissions, or both)
Specific protocol used for emissions reduction/removal calculations
*Note on third-party verification: TCCP does not formally verify emissions inventories or carbon credits purchases, but we do serve as a third-party verifier of climate-related claims through our certification process. This process is publicly documented and available for certified brands to reference in their disclosures.
However, since AB1305 doesn’t currently define what qualifies as third-party verification, we can’t confirm whether our certification alone satisfies all compliance requirements. Please consult your legal counsel to determine what’s needed for your specific case.
Want to Learn More?
Here are some additional resources:
Reminder: This article is for informational purposes only and does not constitute legal advice. Please consult a lawyer to determine how AB 1305 applies to your business.