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 their sustainability visions 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 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. 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.