Leveraging Climate Claims on Pack

Climate change is one of the most pressing challenges of our time and consumers want to take action by purchasing more sustainable products to address this issue. In fact:

As a result, we are seeing more brands use climate claims such as carbon zero/carbon neutral and carbon reduced claims on their products, capitalising on this growing segment  of environmentally conscious consumers.

What climate claims are there?

Carbon zero and carbon neutral products have been through a process where the carbon footprint has been calculated from farm to consumer and finally end of life. Any emissions that can’t be reduced today are offset through purchasing high quality carbon credits.

To earn carbon zero or carbon neutral certification, companies must have an emissions reduction plan for their product and have the process audited and verified by independent certifiers.

What are we seeing around the popularity of climate claims for dairy products? 

Climate claims are becoming more popular among consumers for dairy products⁶. According to FMCG Gurus:

Additionally, of these consumers...

Product launches with carbon zero claims have almost doubled since 2017⁴.

Further, in the year to February 2022, 14% of the dairy products launched carried a sustainable claim⁵. Despite the popularity and growth in carbon zero and carbon neutral claims, they are still extremely rare with less than 1% of dairy products featuring these claims⁶. This creates an opportunity for brands to demonstrate climate leadership and capture first mover advantage.  

With the growing focus on sustainability, consumers increasingly understand that their purchase decisions make a difference. Hence, brands can show their commitment to sustainability by offering carbon zero/carbon neutral and carbon reduced options⁵. Brands should be transparent to enhance consumer trust through carbon footprint labelling and front of pack communications to empower consumers in their decision-making process⁵.

Businesses that have implemented carbon-reduction initiatives will likely be able to capture growing consumer demand and industrial application for dairy products⁵.
 

How often are we seeing climate claims being used around the world?

There are varying levels of knowledge and understanding of the climate crisis and climate claims around the globe. This extends to what specific climate claims mean and how these types of products support reductions in emissions.

It is important for businesses to consider which markets they want to play in and to investigate the different levels of familiarity and popularity of climate claims within each market. We expect that businesses will also need to invest more in advertising and promotion to lift awareness and educate consumers on what these claims actually mean and how buying products carrying these claims supports their climate change action needs.

Climate claims are likely applied most in these regions due to high levels of consumer awareness as government response has been strong. According to Euromonitor International, Australasia is not at the forefront in terms of new SKUs with carbon zero/carbon neutral claims in comparison to other developed markets5. This presents an opportunity for brands to explore climate claims in this region.

In Fresh and Packaged Food, Asia Pacific makes a discernible contribution of SKUs according to data from Euromonitor International⁶. Furthermore, we are seeing greater consumer interest in the carbon footprint of food and therefore, rising demand for products with climate claims across the different regions as consumers actively seek more sustainable options.

What are some key considerations for businesses when thinking about using climate claims?

Brands should consider utilising carbon zero/carbon neutral and/or carbon reduced claims on their products to empower consumers to make more sustainable choices and meet the growing consumer need to act on climate change. When choosing whether to use climate claims on a consumer product, businesses should explore three key considerations:

1. What action is your business directly taking to reduce emissions?

In order to make these claims, businesses must have robust plans in place to reduce emissions and transparent reporting in place to track their progress towards net zero.

Businesses should directly reduce emissions where they can and only offset where there is no viable solution to reduce.  

Reputable carbon zero/neutral certifications also require businesses to have a long-term plan for reducing emissions in place alongside emission reduction targets to ensure credibility. This is critical to protect brands against allegations of greenwashing.

Climate claims are intended to enable consumers to act on climate change today and it’s crucial that businesses also hold themselves accountable for meeting long-term emissions targets.

2. Who is the target consumer?

It’s important to consider the target consumer and whether the carbon zero/carbon neutral or carbon reduced claim will be relevant and persuasive for them. The claim should help the consumer address the particular need the product was created to solve.

3. How does the claim fit with the product and brand?

Businesses should check the climate claim aligns with the brand and product positioning. Climate claims are not for every product. Some products may be intrinsically not sustainable so adding a climate claim simply doesn’t make sense. The claim should complement the product and be congruent with the brand’s values.

In this way, businesses should select climate claims that align and enhance key elements of the brand’s story and the businesses’ purpose.

There are opportunities to leverage climate claims to demonstrate how products meet the needs of the conscious consumer to improve brand preference and justify price premiums.

The views expressed above are the opinion of the author, not those of Fonterra, and Fonterra is not responsible for any decisions taken in reliance on the same.