In the decade since the Paris Agreement took effect, corporate climate credibility has been evaluated with two yardsticks: tonnes and targets. But with so little progress made toward achieving the global climate goals set back in 2016, these measures increasingly appear to serve corporate communications more than climate accountability.
For decarbonization to progress in the next decade, standards must shift quickly toward financial accountability, even if it means shedding closely held beliefs about the importance of a shared net-zero vision. Corporate climate frameworks still largely overlook how companies will finance their transition to net zero.
Tonnes, Targets and Dollars
Historically, companies have focused on two things: measuring their emissions in tonnes and setting net-zero targets. The assumption was that if companies reached net zero by 2050, the world would too.
Carbon and climate neutrality predate corporate net-zero targets by at least 15 years. The two approaches have since overlapped, but their relationship remains contested. Some argue that carbon neutrality can undermine ambitious climate action, while others see it as complementary to net-zero targets.
We launched the Climate Neutral Certified program in 2019 because of its impact potential: companies and consumers already understood neutrality better than any of the other jargon-rich climate standards, and it had a strong shot at being a movement that would scale up climate project investment. Our certification required companies to measure and disclose their emissions, take steps to cut them, and fund quality, verified carbon credits to address residual emissions.
Within four years after launching, we had certified nearly 350 high-visibility consumer brands around the world with more than USD 10 billion in combined annual revenues. But over the years, we came to understand the movement’s blind spots more clearly, and one stood out: companies were not consistently reporting how they were funding climate solutions, or how much they were spending to meet their climate targets.
Putting Capital Behind Climate Action
In 2025, we replaced Climate Neutral Certified with The Climate Label, a new standard designed to address this gap. It uses a carbon fee, with certified companies paying a fee based on their emissions that goes toward a “Climate Transition Budget” (CTB). The CTB sets the minimum amount a company must spend on eligible climate solutions.
Since its introduction, companies that have earned The Climate Label certification, including REI, Reformation, Blueland, and Etsy have collectively documented more than USD 60 million of investment in climate solutions.
The evolution of this approach has raised bigger questions about the role funding should play in corporate climate action, how companies should put that capital to work, and what it takes to make climate investment a lasting business priority. For years, the climate community has debated the merits of different approaches, with concerns about what might happen if too much of the wrong kind of mitigation investment were encouraged. The prevailing view has been,“reduce emissions first, then do the rest.”
If only that were the problem. It is important to distinguish between high and low impact mitigation investments, and to understand the relative costs of different options. However, too much debate over which investments should come first can distract from the need to get climate finance flowing. The scale of the transition requires investment across a wide range of solutions.
Climate Investment as a Business Priority
There is another highly practical reason to make climate investment more explicit: decarbonization is too often seen as a pet project. Sustainability teams advocating to preserve and grow their budgets need to find their way into the mainstream, and the language of finance is easy to socialize internally, offering a bridge to the rest of the company.
Telling a corporate CFO that the company needs to spend millions to compensate for its emissions can make climate action look like a cost. Framing those investments around better materials, cleaner and more efficient energy, and innovative production methods, turns climate priorities into part of the business strategy.
Putting an explicit price on emissions also creates a common, trackable internal financial metric for climate initiatives. By evaluating investments against a cost-per-tonne measure, companies can compare decarbonization opportunities and better understand where their climate budgets can have the greatest impact.
Where Climate Standards Are Heading
Measuring emissions, taking steps to reduce them, and setting long-term targets all matter. But without the funding to implement them, they remain plans. There are signs that the broader standards landscape is beginning to recognize this by moving toward action and implementation.
Climate Transition Action Planning has become more common these last few years and typically includes climate projects and evidence that funding has been allocated to implement them. The Science Based Targets initiative (SBTi) new V2.0 Standard includes a dollar-per-tonne provision for “ongoing emissions responsibility.” The recently introduced Climate Contribution Framework (CCF) broadens the accountability lens beyond emissions reductions, considering how companies scale climate solutions and finance climate action alongside reducing their own footprint.
As global climate standards continue to evolve, climate transition funding should be a more explicit part of how we assess credible corporate climate action. Climate targets are only as meaningful as the financing behind them.
