On the surface, cutting a product’s emissions may not sound too difficult. After all, today’s companies can purchase carbon offsets or invest in renewable energy with relative ease. But in practice, there are many systems and processes that must change, including the sourcing of raw materials, manufacturing, packaging, transport, and end of life disposal.
The rules and labels around product climate claims have also changed quickly. The labels that once promised “carbon neutral” products are being retired or restricted, and that matters if you want to shop with confidence. So what should you look for now? Let’s take a closer look.
Key takeaways
- No product has zero emissions. Climate labels are best read as signals about how a product’s footprint was measured, reduced, or funded.
- The Carbon Trust stopped offering carbon neutral verification in September 2023 and now offers labels focused on emission reductions and footprint comparisons.
- Since September 27, 2026, EU rules prohibit claims that a product has a neutral, reduced, or positive climate impact based on offsetting alone.
- In California, companies making net zero or carbon neutral claims must publish information backing them up.
- Better signals include third party verified footprints, published reduction targets, and clear explanations of how any carbon credits are used.
- Carbon credits fund verified reductions or removals elsewhere. They do not change the emissions from making or using a product.
What Has Changed for Product Climate Labels
2026 snapshot
- Carbon neutral labels are being retired: The Carbon Trust, which offered a carbon neutral verification from 2012, stopped offering it in September 2023. Its newer labels focus on products with reducing footprints and on footprint comparisons. Evian dropped its carbon neutral label in 2023, and Nestlé withdrew its carbon neutral pledges for brands including KitKat and Nespresso in June 2023.
- EU rules now apply: Directive (EU) 2024/825 applies from September 27, 2026. It prohibits claims that a product has a neutral, reduced, or positive climate impact based on offsetting, along with vague claims like eco friendly or climate friendly without recognized proof. Some certifiers have updated their labels to meet it.
- California requires disclosure: California’s Voluntary Carbon Market Disclosures Act (AB 1305), in effect since January 1, 2024, requires companies making net zero or carbon neutral claims to post public information on how the claim was substantiated and whether it was independently verified.
- Courts are weighing in: A New York federal judge first let a class action over Evian’s carbon neutral label proceed in January 2024, then dismissed it on reconsideration in 2025, reasoning that the back label pointed shoppers to more information. The case shows how contested the term is.
- Retail badges keep growing: Amazon’s Climate Pledge Friendly program, which relies on third party certifications, now covers more than 2 million products, up from 25,000 in 2020.
What Does “Carbon Neutral” Mean on a Product?
In the same way that food labels make it easier to find vegan or gluten free products, carbon neutral labels were meant to give shoppers confidence about a product’s climate impact. In practice, “carbon neutral” generally meant that a brand measured the emissions associated with a product and then balanced what remained with carbon offsets. It did not mean the product produced no emissions, and consumer research reported by The Grocer found that shoppers were often confused by the term.
That is why certifiers and regulators have shifted toward clearer claims, such as how a product’s footprint is changing over time or how it compares with similar products. Product footprints are generally assessed under one of two scopes:
- Cradle to gate: covers the total greenhouse gas emissions of a product from the extraction of its raw materials to its production at the point when it leaves the factory. It is most commonly used for business to business (B2B) products.
- Cradle to grave: covers an entire product’s life cycle from the extraction of its raw materials right up to the emissions created during its disposal. It is generally used for business to consumer (B2C) products.
There are a growing number of organizations involved in carbon certification and labeling, and some are more thorough and reputable than others. Assessing a product’s carbon life cycle is no simple task, requiring extensive research and an in depth analysis of the associated manufacturing, transport, and supply chain networks. In many cases, the harder and more time consuming a verification is, the more weight there is behind the final label. The Carbon Trust launched its footprint label in 2007, and Terrapass has supported clients who pursued Carbon Trust certification.
How Is a Product’s Carbon Footprint Measured?
To measure a product’s footprint, a brand generally engages an independent organization to assess its scope 1, 2, and 3 emissions. For example, a shoe manufacturer would look at:
Scope 1: Direct emissions
- Fossil fuels used at the factory
- Fuel consumed by company vehicles
Scope 2: Indirect emissions
- Electricity used at the factory
- Fuels bought and used at the factory
Scope 3: Supply chain emissions
- Purchased raw materials and services
- Capital goods, equipment, and machinery
- Upstream (input) emissions from fuel, energy, transportation, and distribution
- Downstream (output) emissions from fuel, energy, transportation, and distribution
- Business travel and employee commuting
The Carbon Trust, for example, carries out a life cycle assessment in line with international standards and then works with the manufacturer to gauge the product’s footprint and plan reductions. Those plans typically combine energy efficiency measures, upgrades to logistics networks, investment in renewable energy, and, for emissions that remain, funding for certified high quality carbon offsets. The Carbon Trust has said that companies should describe that last step as a climate contribution or funding of additional climate projects.
Evian is a useful example of how the landscape has shifted. According to a Carbon Trust case study, the brand pursued carbon neutral certification for its bottled water through measures such as:
- Building a new bottling facility powered by renewable energy.
- Reducing the carbon intensity of its logistics network, including adopting train networks to replace trucks.
- Increasing the recycled content in its packaging and redesigning packaging to use fewer materials.
- Purchasing carbon offsets to balance the brand’s remaining emissions.
Evian has since dropped the carbon neutral label and has said it will not seek global recertification, and the label became the subject of a legal challenge, as noted above.
What Are the Benefits of Credible Product Climate Labels?
With so many different terms used in marketing these days, such as “carbon neutral,” “sustainable,” “net zero,” and “eco friendly,” it’s often hard to know exactly what they mean. When a label is based on a transparent, independently verified method, there are real advantages:
- Consumers get a reliable view of how a product’s footprint was measured and whether it is being reduced.
- Footprint comparisons make it easier to choose between similar products.
- Companies can demonstrate a commitment to cutting emissions beyond individual products. The verification process is often costly and time intensive, so even a brand that doesn’t label every product is showing a broader commitment to better practices.
- Labels can encourage investment in efficient technologies, renewable energy, and verified carbon projects.
- Brands that set a higher bar can encourage competitors to follow.
There are limits too. A label is only as good as its method, and no label can make a product’s emissions disappear. As many of us look for new ways to cut our emissions, we can each help through the small choices we make every day. In addition to using renewable energy, funding verified carbon offsets, and rethinking how we travel, looking closely at product claims is an immediate way to shop with more confidence.
How to Find Products With Credible Climate Claims
If you want to support companies taking climate action but you’re not sure where to start, these steps can help:
- Look for labels that show a measured footprint or reductions. The Carbon Trust’s product carbon footprint labels, for example, show products with footprints that are reducing year on year or that compare favorably with similar products. Labels signpost to more information, so take a moment to follow it.
- Check third party certifications for specific attributes, such as ENERGY STAR for appliances, Fair Trade, FSC for wood and paper, and Certified B Corporation, rather than marketing words like green or eco friendly.
- Use retailer badges as a starting point, not the final word. Amazon’s Climate Pledge Friendly program highlights products with third party sustainability certifications, and it now covers more than 2 million products. Look at which certification applies to the specific product you’re buying.
- Read the company’s own explanation. Credible brands publish how they measured a footprint, their reduction targets (ideally validated against science based criteria), and how much of their effort comes from cutting emissions versus funding carbon projects. See the clients and partners that take part in Terrapass carbon offset programs.
- Be wary of broad or absolute claims. Words like carbon neutral, climate friendly, or net zero on a single product deserve a closer look, especially if the claim leans on offsets alone.
- Prefer accurate descriptions of carbon credits. A statement like “we fund verified carbon reduction projects equal to X tons” tells you more than a label that implies a product has no impact.
And finally, stay on the lookout for badges and logos on the food and household items you buy every day. If you see a badge you’re not sure about, read the label closely or search for the issuing organization online. In many cases the badge will include a website address or QR code to explain what it covers.
Where Carbon Credits Fit In
For businesses, the best approach is to calculate emissions, cut what you can, and fund verified reductions or removals for what remains. Carbon credits are one part of that plan, and they are best described as funding climate projects, not as making a product neutral. Terrapass supplies verified carbon credits through our projects, certified under recognized standards. Start with the carbon footprint calculator, read carbon offsets explained, learn the difference between a carbon offset and a carbon credit, or explore carbon offsets for business.
FAQ: Carbon Neutral Products and Climate Labels
What does carbon neutral mean on a product?
It generally meant that a company measured a product’s emissions and balanced the remainder with offsets. It does not mean the product has no emissions, and the term is being retired or restricted.
Does the Carbon Trust still certify products as carbon neutral?
No. The Carbon Trust stopped offering carbon neutral verification in September 2023 and now offers labels focused on emission reductions and footprint comparisons, although some older labels may still appear on products.
Can products still be marketed as carbon neutral?
In the EU, since September 27, 2026, claims that a product has a neutral, reduced, or positive climate impact based on offsetting are prohibited. In the US, the FTC’s Green Guides warn against unqualified environmental claims, and California requires public disclosures from companies making carbon neutral or net zero claims.
What is the difference between cradle to gate and cradle to grave?
Cradle to gate covers a product’s emissions from raw material extraction to the factory gate, and is common for business to business products. Cradle to grave covers the entire life cycle through disposal, and is generally used for consumer products.
What are scope 1, 2, and 3 emissions?
Scope 1 is direct emissions, such as fossil fuels burned at a factory. Scope 2 is indirect emissions from purchased electricity and fuels. Scope 3 is supply chain emissions, including purchased materials, transport, distribution, business travel, and commuting.
How can I tell if a climate claim on a product is credible?
Look for independent verification, a clear explanation of how the footprint was measured, published reduction targets, and an accurate description of any carbon credits used. Be cautious about broad or absolute claims such as carbon neutral or climate friendly.
Is Amazon’s Climate Pledge Friendly badge reliable?
The program highlights products that carry recognized third party sustainability certifications and covered more than 2 million products in 2025. It is a useful starting point, but check which certification applies to the specific product you are buying.
Can carbon offsets make a product’s emissions disappear?
No. Offsets fund verified emission reductions or removals through projects elsewhere. They do not change the emissions from making or using a product.
Sources for the 2026 data:
“https://www.carbontrust.com/what-we-do/carbon-footprint-labe
