- South Pole launches a new climate claim, Funding Climate Action (FCA) and a related label, to provide companies with a transparent pathway to scaling up climate investment today.
- With increased scrutiny on carbon neutral claims companies are under unprecedented pressure to authentically communicate their climate goals to make good on commitments – but need to be able to claim green efforts with confidence and transparency.
- Tested with companies, leading NGOs and policy experts including the Voluntary Carbon Markets Integrity initiative, the FCA enables companies to invest in verified mitigation contributions to cover residual carbon emissions, while declaring genuine green credentials.
- In a recent poll of 1,500 consumers across Europe and the US, 84% of participants say they are more likely to buy a product with the South Pole’s ‘Funding Climate Action’ label and 78% say they trust that the label means credible climate action has been taken.
- An early pioneer of enabling corporate climate action, South Pole knows companies are more likely to invest in mitigation beyond their value chain if they can take credit for their green strides which is why the new claim was publicly praised in the SBTI’s recent Beyond Value Chain Mitigation consultation launch.
London, June 27, 2023 – Today, South Pole launched ‘Funding Climate Action’ (FCA), a new climate claim and accompanying climate label to help companies credibly communicate climate action within and beyond their value chain. The label is a marker of quality that illustrates an organisation is taking responsibility for its emissions and has been through a comprehensive process to ensure credible climate action has been taken. To renew the label, companies must transparently communicate its sustainability vision and achievements which are reviewed on an annual basis.
Today’s launch marks a new and much needed chapter in the corporate claims landscape as confusion around climate claims is prevalent and green-hushing by companies is on the rise. An early pioneer of enabling corporate climate action, South Pole has noted a rise in the misuse of some environmental claims, Thus highlighting the need for a more viable alternative climate claims method and label like the FCA.
South Pole is welcoming other efforts by regulators and standard setters to create clarity and transparency, such as the new ISO14068 recommendation. Thought leadership on this topic by other actors, including the VCMI, SBTi and the Gold Standard, who are developing guidance on ensuring credible claims is also highly favoured.
The FCA is a new and smart way for companies to declare climate investments which go above and beyond their own value chains, alongside their existing efforts to decarbonise – an imperative recognised by Article 6.4 in the Paris Agreement and by the Science Based Targets initiative (SBTi). The SBTi in fact publicly praised South Pole’s efforts and the new climate claim in its recent beyond value chain mitigation consultation launch. The voluntary carbon market offers a credible, proven way for companies to drastically scale up their climate action now, and FCA provides a pathway for companies to take credit for their effort with confidence.
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 or greenhushing.”
Private sector investment in climate and nature must grow by over 10 times by the end of this decade if the Paris Agreement is to be delivered on, and investments in nature-based solutions – made possible via mechanisms like the voluntary carbon market – must also triple to at least $200 billion a year. However, recent history shows that companies are unwilling or unlikely to invest in climate action beyond their value chains unless they can claim credit for doing so.
The FCA’s funding amount is based on any residual carbon emissions – ‘a ton for a ton’. This is an incentive for businesses to have as little sustained emissions as possible. But if they do, they take responsibility by matching it with the funding of verified, high integrity mitigation contributions beyond their value chain. For companies who are willing to go beyond covering their residual emissions, South Pole’s concept offers to top up their ton-for-ton contributions with monetary contributions on a money-for-ton basis. This sets an ambition to transition towards a contribution which is equal to the social cost of carbon.
South Pole’s consumer research with over 1500 participants in Europe and in the US concluded that FCA has passed its first tests on transparency and desirability with flying colours. 84% of participants say they are more likely to buy a product with South Pole’s ‘Funding Climate Action’ label, 83% feel well informed by the company’s bespoke climate action landing page attached to the label and 78% say they trust that the label means credible climate action has been taken.
South Pole has not only tested their proposal among consumers ahead of this launch, but also undertook a 130+ stakeholder consultation to determine how FCA would be received by businesses and other key stakeholders, such as climate policy experts and leading NGOs. The results were overwhelmingly positive, with 94% of respondents saying they support the need for corporate claims to be compatible with the Paris Agreement, and 69% being supportive of the claim.
Buy-in from industry thought leaders has already been won with Oxford Net Zero praising 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, said: “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.”
“By fostering transparency and providing incentives, we can empower businesses to accelerate climate action,” said Suzanne DiBianca, EVP and Chief Impact Officer at Salesforce. She added: “South Pole’s ‘Funding Climate Action’ claim sets a new standard, encouraging companies to go beyond their own four walls. It’s time for companies to unite on shared goals and propel the global net zero transition forward.”
Supportive Quotes:
Dr. Cornelius Walter, Impact investor, advisor at Lightrock (global private equity platform): “By encouraging the adoption of a new contribution claim, South Pole is helping to create a paradigm shift in how businesses view and engage with climate action. This initiative paves the way for a future where companies not only prioritise profitability but also embrace their responsibility to address the pressing environmental challenges we face.”
Mahua Acharya, Chief of Staff at C-Quest Capital: “There is no way we can deliver the goals of the Paris Agreement without the private sector. But for companies to make claims around their efforts in a credible way, we need improved and verifiable ways to demonstrate how their investments are aligned with our shared goals.”
Amelie Tan, UK and WW Regional Manager, Transition Accelerator, Carbon Disclosure Project: “Companies must urgently accelerate their science-led value chain emission reductions, and go even further by investing in mitigation outside their value chains. Credible and transparent contribution claims help companies to amplify their beyond value chain mitigation activities and as a result, increase our chances to resolve the climate crisis.”
Britta Wyss Bisang, Global Sustainability Director, Schoeller Allibert: “The FCA label reflects our investment in addressing climate change in a meaningful and verified way while constantly reducing our climate impact. With the help of the new label, we are able to display this climate action in the most transparent and credible way.”
Patrick Lefevere, CEO of Decolef, Soudal Quick-Step (Tour de France racing team): “Combining our passion for cycling and the environment, we aim to amplify our collective voice and raise awareness about the urgent need to address climate change and strive to inspire others to join the movement for ‘Funding Climate Action’. It all starts with us.”
