Regulating corporate green claims and greenwashing

Carbon Market Watch calls for a ban on corporate "net zero" and "carbon neutrality" claims, arguing that these terms are ambiguous and often mask inaction. The brief recommends that governments, particularly in the EU, require companies to report absolute emission reductions separately from external financing and to cover all value chain emissions (Scopes 1-3). It further warns against the use of low-quality carbon credits and the risk of double counting under Article 6 of the Paris Agreement.

• Corporate climate claims often use loopholes to exaggerate ambition, such as selecting advantageous base years, omitting specific emission scopes, or failing to disclose the use of carbon offsets.
• Terms like "carbon neutral" and "net-zero" are considered ambiguous and elastic, making it difficult for regulators or independent parties to verify their validity and allowing companies to claim "carbon-neutral fossil fuels."
• The document recommends that companies be banned from communicating climate impact on a purely net basis and must instead report absolute emission reductions separately from reductions financed outside their value chain.
• To ensure transparency, companies should set targets covering Scopes 1, 2, and 3 of their value chain and report reductions in both absolute and relative terms, including a clear explanation of the base-year used.
• There is a significant risk of double counting emission reductions under Article 6 of the Paris Agreement if both a company and a host country claim the same reduction toward their targets.
• The quality of carbon credits is generally poor, particularly REDD+ projects, because carbon storage in trees is temporary while fossil fuel emissions persist for centuries.

APA

Carbon Market Watch (2022). Regulating corporate green claims and greenwashing. https://carbonmarketwatch.org/wp-content/uploads/2022/02/Regulating-corporate-claims-policy-recs.pdf

Chicago

Carbon Market Watch. Regulating corporate green claims and greenwashing. 2022. https://carbonmarketwatch.org/wp-content/uploads/2022/02/Regulating-corporate-claims-policy-recs.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=Regulating corporate green claims and greenwashing |date=7 February 2022 |url=https://carbonmarketwatch.org/wp-content/uploads/2022/02/Regulating-corporate-claims-policy-recs.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2022regulating, author = {{Carbon Market Watch}}, title = {{Regulating corporate green claims and greenwashing}}, institution = {Carbon Market Watch}, year = {2022}, month = feb, url = {https://carbonmarketwatch.org/wp-content/uploads/2022/02/Regulating-corporate-claims-policy-recs.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }