How to Tell If a Company is Green (or Not)

Want to help fight climate change? Sure, you can limit how much energy you use at home, plant native plants for climate-threatened birds, and speak up for environmental initiatives. But unless you’re willing to go really far off the grid, the companies with which you do business will matter almost as much as your energy habits. So how do you know which ones to trust? Nearly all businesses purport to help the environment—or as our CEO David Yarnold recently argued, “CEOs and their marketers have gotten the message that going green is good for business.”

They’re right: a 2015 study found that 9 out of 10 consumers expect businesses to act with environmental and social responsibility, and 84 percent said they seek out responsible products whenever possible. So how do you separate the ones that are all talk from those that are serious?

Here’s what to look for when choosing products that are better for the planet.

What to Look for When Shopping:

• Carbonfree and CarbonNeutral Labels: These labels are third-party certified by Carbonfund.org and Natural Capital Partners, respectively, organizations that work with companies to reduce their carbon emissions and offset whatever can’t be reduced.
• The Rainforest Alliance Certified Label: Products must score at least 80 percent overall on 10 criteria related to limiting deforestation (a major way to fight climate change) and other environmental and social issues.
• Check Out “Post-Consumer Content” or "Recycled Content" Listings: When shopping for paper products, the packaging should list this somewhere—the higher the better.
• The WindMade Label: A company must get at least 75 percent of its energy from wind or other renewable sources to get this label.

What to Ignore When Shopping:

• Terms like “eco-safe,” “environmentally friendly,” “environmentally safe,” and “environmentally preferable” have no standard definition or third-party certification, so this type of label "could mean whatever the company wants it to mean," says Charlotte Vallaeys of Consumer Reports. To learn more about environmental labels and what they mean, visit Consumer Report’s Greener Choices database, the Federal Trade Commission, or the Ecolabel Index.

Do Your Homework Online:

• Powered by Solar: The Solar Energy Industries Association lists the 25 corporations with the most solar capacity and installations in the United States.
• Greener Buildings: Where you do business matters, too. Take a look at the companies that have earned LEED certification (Leadership in Energy and Environmental Design, a series of standards set by the U.S. Green Building Council). As a separate initiative, the U.S. Department of Energy’s Better Buildings Challenge’s website offers details on participants' goals and progress to cut energy use.
• Companies Pricing Carbon on Their Own: Sure, carbon pricing might not be required, but that hasn’t stopped more than 1,000 companies worldwide from setting a self-determined carbon price for their emissions. Some, including Disney, Microsoft, and Shell, actually charge internal fees for carbon use, which then fund renewable energy initiatives. Check out this list of North American companies using carbon pricing as of September 2015.
• Listing Carbon in Annual SEC Filings: All publicly traded companies are required to submit public Securities and Exchange Commission filings annually. In these filings, some companies list their greenhouse gas emissions and/or how climate-related risks could affect their bottom lines.
• Assessing Leaders in the Field: The nonprofit CDP (originally known as the Carbon Disclosure Project) compiles an annual report for investors and other consumers that scores companies based on their emissions and climate actions. Take a look at its 2015 Climate A List of leaders, and view scores for participating companies. CDP’s criteria look at direct and indirect carbon pollution, transparency, and verification of emissions. Another useful way to use the list? Don’t just check out companies whose products you’re interested in buying—this can also be used as a resource for assessing which companies you want to invest in, says Zoe Tcholak-Antitch of CDP.
• Greening the Supply Chains, Too: Indirect emissions from supply chains—which include sourcing, producing, and shipping products—are responsible for the majority of many companies’ climate impacts, says Tcholak-Antitch. Check out this list of companies pledging to end deforestation driven by commodities from their supply chains by 2020.

See Who’s Speaking Up Politically:

• Calling for Climate Laws: More than three dozen companies are members of the BICEP coalition (Business for Innovative Climate and Energy Policy), which advocates for U.S. legislation to cut carbon emissions by increasing renewable energy, forest preservation, energy efficiency, and investment in clean energy technology. BICEP's members include major corporations such as General Mills, IKEA, Nike, and Unilever.
• Support for Clean Energy: Last year 365 companies and investors signed a letter to state governors in support of the Clean Power Plan.

The everyday choices you make as a consumer might seem small, but they add up: household consumption causes up to 60 percent of global greenhouse gas emissions. But with a little careful consideration, courtesy of the recommendations above, that number could start to go down.