The Carbon Neutral Standard

This document describes the requirements that apply to all entities seeking certification during calendar year 2024 for their 2023 emissions. ‍  Last updated: 20 May 2024.

Quick start:

To better understand this document, the following terms are important to understand.

• NetNada Carbon Neutral Certified Standard (NCNS): all the information present in this document.
• Carbon Neutral Business Certified label: what your business receives if it meets the standard. Commonly referred to as a ‘carbon neutral’ certification.
• Carbon Neutral Event Certified label: what your event receives if it meets the standard. Commonly referred to as an ‘event carbon neutral’ certification.
• NetNada Approved Certifiers (NAC): They verify information for large organisations seeking a Business Carbon Neutral Certified label

‍

How to apply for and receive a Carbon Neutral Certified label?

Companies must follow the NetNada Carbon Neutral Certified Standard (NCNS), apply for certification, and receive formal approval from NetNada Approved Certifiers (NAC) in order to be licensed to use the Carbon Neutral Certified label.

01 Eligibility

Eligible Certifying Entities

The NetNada Carbon Neutral Certified Standard represents a leading and comprehensive approach to climate action by businesses. Businesses can pursue certification for a corporate entity, subsidiary, or brand, but individual products or services are not eligible.

To maintain the integrity and reputation of the NetNada Carbon Neutral Certification and its marks, companies operating in sectors listed on the Restrictions on Eligibility for Certification are ineligible for NetNada Carbon Neutral Certification.

NetNada Standard for Events and Films

While Carbon Neutral Certification primarily targets corporate brands, non-brand entities such as events or film projects may still qualify for certification through the same standard receiving a Carbon Neutral Event Certification and Carbon Neutral Film Certification.

02 Measurement

a. Measurement Boundaries

For certification eligibility in 2024, entities must track their cradle-to-customer emissions either from the entire 2023 calendar year or an overlapping full fiscal year. This tracking must include emissions from all products, services, and business activities. Fiscal year data is valid if it overlaps with at least six months of the 2023 calendar year. Measurement boundaries follow the Greenhouse Gas Protocol, encompassing all Scope 1 emissions, all Scope 2 emissions, and 8 out of the 15 categories of Scope 3 emissions, as outlined below.

Table 1: Carbon Neutral Certified measurement boundary requirements

* Investments Required for Finance and Investment Firms - Entities with substantial financial holdings ( at least 5% of revenue is derived from these activities) are also required to measure Greenhouse Gas Protocol Scope 3.15 emissions. Please note, institutions determined to have significant financial holdings encompass asset managers/owners, retail and commercial banks, insurance companies acting as asset managers, real estate investment trusts (REITs).

b. Data Requirements

Use of verifiable activity data vs. estimated data for Scope 1 and 2: Certifying entities are encouraged to provide actual metered or billed data, rather than modeled estimates, for Scopes 1 & 2.

Use of activity data: Certifying entities are strongly advised to utilise activity data or physical data for emissions Scopes and Categories where emissions account for 5% or more of the total footprint. Companies that fall outside the Small Company Pathway must use activity data or physical data (e.g., kWh instead of dollars spent on electricity) for Scopes 1 and 2, beginning in their second annual certification year.

• What is activity and physical data? Activity data includes as litres of fuel, kWh of electricity, km travelled by plane, kilograms of a material. Using this inputs provides more accurate GHG results.

c. GHG Measurement and Verification

While all GHG inventory submissions must follow the boundaries and categories defined in Table 1, the inputs and how you measure your business emissions depends on your company size.

If an organisation that seeks certification has multiple subsidiaries, the combined revenue of all certified entities will be used to determine the Verification Requirements Pathways.

Once GHG inventory has been completed, our staff will review your submission and evaluate it for compliance with the Standard.

• Small business pathway: below $5 million in revenue for 2023
• Medium business pathway: between $5-100 million in revenue for 2023
• Large business pathway: above $100 million in revenue for 2023

Table 2: Verification Requirements Pathways

‍

Small business pathway: below $5 million in revenue for 2023

Estimate your emissions using the NetNada Carbon Management Platform (NCMP)

If you measure your emissions using the NetNada Carbon Management Platform, here’s what you need to submit:

If you don’t measure through the NetNada Carbon Management Platform, here’s what you need to submit:A complete inventory with signed attestation. (No third party verification required.)A complete inventory with signed attestation. (No third party verification required.)

You can make a copy of the Good Faith Attestation document here.

Medium brands: 2023 revenues $5-100 million

‍Create a report summarising total emissions by scope and category. This report should be generated using either the NetNada Carbon Management Platform, an external calculator, a consultant, or an in-house tool, provided it complies with the GHG Protocol and adheres to the measurement boundary criteria. Independent verification is not necessary.

If you measure your emissions using the NetNada Carbon Management Platform, here’s what you need to submit:

1. A complete measurement report from the NetNada Carbon Management Platform.

2. A ‘good faith’ signed document confirming the accuracy and intention of completeness of the emissions inventory being submitted and the data used. For example, relevant expenses were not omitted.

If you don’t measure through the NetNada Carbon Management Platform, here’s what you need to submit:

1. A complete measurement report that clearly describes your methodology (word or PDF) including: total Scope 1-3 emissions reported in tCO2e and broken down by GHG Protocol categories, an index of all operational data used, citations or source the GHG emission factor applied, description of boundaries, assumptions, and materiality threshold applied.                            
2. 2. A ‘good faith’ signed document confirming the accuracy and intention of completeness of the emissions inventory being submitted and the data used. For example, relevant expenses were not omitted.

Large brands:2023 revenues above $100 million

‍Create a report summarising total emissions by scope and category. This report should be generated using either the NetNada Carbon Management Platform, an external calculator, a consultant, or an in-house tool , provided it complies with the GHG Protocol and adheres to the measurement boundary criteria.  A third-party verifier must review the inventory (see below).

If you measure your emissions using the NetNada Carbon Management Platform, here’s what you need to submit:

1. A complete measurement report from the Carbon Management Platform.
2. A ‘good faith’ attestation confirming the accuracy and completeness of GHG inventory and underlying data.
3. A third party verification report that clearly verifies your data inputs and conforms to the “Requirements for Third-party Verification” section below.

If you don’t measure through the NetNada Carbon Management Platform, here’s what you need to submit:

1. A complete measurement report that clearly describes your methodology, including: total Scope 1-3 emissions, reported in tCO2e and broken down by GHG Protocol categories, an index of all operational data used, citations for each GHG emission factor applied, description of boundaries, assumptions, and materiality threshold applied.
2. A third party verification report that verifies your data inputs AND methodology, and conforms to the “Requirements for Third-party Verification” section below.

d. Requirements for Third-party Verification

All verification reports should follow these five common principles of carbon footprint verification: relevance, completeness, consistency, transparency, and accuracy.Verifications must conform to one of these standards: ISO 14064-3, ISAE3000, ISAE 3410, or Corporate GHG verification guidelines from ERT. Verification reports must specify the level of assurance provided by the report as either limited or reasonable.g:

Third-party verifiers (e.g. environmental auditors or consultants) must be able to demonstrate the following:

• At least five years of corporate history working in carbon accounting and/or lifecycle analysis at product and company levels, with at least 25 documented client engagements involving corporate or product level footprints.
• At least five years of corporate history auditing and/or verifying corporate GHG footprints of companies with over $100 million in annual revenue.
• Ability to demonstrate independent control and ownership from the company under review to avoid any conflicts of interest.
• Ability to act as an unbiased third party in the verification process.
• At least five years of corporate history with one or more of the third-party verification standards referenced in this section 2(d).

e. Counting Renewable Energy Purchases for scope 2

Renewable Energy Certificates (RECs) that are bundled or unbundled with energy purchases may be used to make “market-based” adjustments to the total emissions from your electricity consumption.

The Standard requires that vintages of any Energy Attribute Certificates used for compliance be purchased within the certification year or one year prior. For example, when considering 2023 Scope 2 emissions, you must purchase RECs with a vintage of 2022 or later. All RECs used for compliance must also take place on the same grid subregion as your Scope 2 electricity consumption.

For example, if your business operates only in one state of Australia, your RECs need to be attributed to that subregion.

f. Corrections to Measurement Reports

If errors or omissions are identified in a previous submission that exceed a 5% materiality threshold, the certified entity is obligated to restate the emissions for the affected year(s).

• Lower Restated Emissions: Should the restated emissions be lower than originally reported, the company is permitted to bank the surplus carbon credits. These credits can be used in future years to achieve Climate Neutral Certification, provided that they comply with the current requirements of the Standard.
• Higher Restated Emissions: In the event that the restated emissions are higher, companies are encouraged to address any shortfalls in their carbon credit purchases to ensure continued compliance with the certification standards.

03 Reductions

a. Requirements for a Reduction Action Plan

All organisations seeking certification must develop a Reduction Action Plan using Change Climate’s prescribed template.

The plan should demonstrate progress in reducing emissions from their products and services and include:

• At least two initiatives aimed at reducing emissions within the next 12-24 months.
• At lest one initiative aimed at employee education in sustainability
• For certifying entities with annual revenues exceeding $5 million, the inclusion of at least one measure targeting Scope 3 emissions.
• Annual progress reports on previous reduction initiatives for recertification.

Science-Based Target Setting Requirements:

• Organisations with annual revenues over $100 million must establish a science-based reduction target for 2030, covering all emissions listed in Table 1. This target can be:
  • A default goal of a 50% reduction based on the 2023 emissions baseline.
  • An endorsed target by the Science-based Targets Initiative.
  • A well-documented, sector-specific science-aligned target.
• Entities with annual revenues less than $100 million are strongly encouraged, but not required, to set science-aligned targets for 2030.

In cases where multiple subsidiary within a larger company seek to achieve certification, certifiers will use the combined revenue of all certified brands to determine certification requirements.

b. Checkpoint Year Requirements

Success toward reduction actions and science-aligned targets will be closely evaluated in Checkpoint Years set in 2025 and 2028. Certified entities will be required to evaluate and report on progress towards the following goals:

Checkpoint Year 2025 Goals: • All RAPs set through 2023 should be complete.• Clearly report on progress toward targeted year-over-year emissions reductions.  • You should be roughly 50% toward completing 2030 target requirements, if applicable.*

Checkpoint Year 2028 Goals: • All RAPs established through 2026 should be complete.• You should be roughly 80% toward completing 2030 target requirements, if applicable.*

• Failure to match exact Checkpoint Year reduction plan goals may be explained if you can demonstrate that you have significant pending reduction actions, or that you are following a separate but clear reduction plan with custom baseline or target years.

04 Compensation and offsets

a. Requirements for GHG Mitigation Beyond the Value ChainCertifying entities are required to contribute to greenhouse gas mitigation projects at a level proportional to their measured emissions (all product, services, and operations) by making investments beyond the value chain. Carbon inventories may be adjusted with clean energy purchases made via eligible Energy Attribute Certificates such as RECs or GOs. All carbon credits and/or EACs must meet the following criteria:

• Third-party VerificationCarbon credits must be verified according to one of the following standards: Gold Standard, Verified Carbon Standard, Climate Action Reserve, American Carbon Registry, or European Biochar Certificate.
• Vintage Year RestrictionWith the exception of forestry and land-use, all carbon credits must represent avoided emissions or removals from within the four years up to and including the emissions year. For companies getting certified in 2024 for a 2023 emissions footprint, this includes any vintage year from 2020 through 2023. For forestry and land-use projects, all credits must represent emission reductions from within the seven years up to and including the emissions year, which includes any vintage year from 2017 through 2023. There are no requirements for project start dates as long as the credits meet the vintage year requirement.

c. Portfolio Requirements

All carbon credit purchases must be from the approved project categories and types in Table 3. Certifying entities are encouraged, but not required, to follow the Suggested Portfolio Allocation Targets.

Table 3: Eligible Carbon Credit Types and Categories

05 Disclosure

a. Requirements for Information Disclosure

The Standard requires that companies with active certifications publicly disclose the following information on the Brand Profile Directory on the NetNada website:

1. Total annual GHG footprints calculated broken down by Scope 1, 2, and 3 emissions
2. For recertifying entities, total annual emissions intensity for prior certification years, beginning with 2023 certifications, including any emissions corrections/adjustments. Reporting of historical absolute emissions by Scope is also strongly encouraged
3. Total annual investment (in USD) in carbon removal and avoidance credits as well as the project types supported
4. Categories of certified products and/or services
5. Summary of reduction action plans and science aligned targets (if set)
6. Progress toward past reduction action plans

06 Advocacy

Requirements for Climate Advocacy Reporting

Certified entities are strongly encouraged to engage in lobbying, education and stakeholder (e.g. customer, supplier, employee, consumer) mobilization efforts in support of climate solutions. Applications for certification will include a requirement to report on such activities completed in the prior calendar year. This reporting will not be made public, but should generally include one or more of the following activities:

1. Climate Lobbying: Support climate policy at any political level directly or in collaboration with an advocacy or trade organization.
2. Internal Climate Literacy: Engage your team in the NetNada Sustainability Academy process and conduct education sessions to increase staff understanding of climate issues.
3. Consumer Climate Literacy: Engage consumers in the your Climate Action plan process and importance of climate action.

In addition, use of the NetNada Carbon Neutral label is an important form of advocacy. Re-certifying companies must provide evidence of at least one (1) example of using the label in either a digital or real-world setting.