Volkswagen, TotalEnergies and others face risks over “limbo” credits

The status of carbon-neutral claims made by Volkswagen, Nespresso and other companies has been thrown into doubt after Verra, the world’s largest carbon credit registry, concluded it had issued millions of excess credits to a contentious forest protection project based in Zimbabwe.

The acknowledgement comes after a series of legal cases in which courts have questioned the legitimacy of carbon-neutral claims based on offsets. “There is a lot of exposure to risk and these companies are vulnerable,” said Daniel Cherrin, a crisis communications expert who focuses on climate issues.

The project at the heart of the case is among the most controversial of recent times. The developer, Carbon Green Investments (CGI), said it would use funds from credits sales to reduce deforestation across almost 2 million acres of land around Lake Kariba, in the northwest of the country. A total of 27 million credits were issued to the project between 2013 and 2021.

Verra launched an investigation in October 2023 after a story in The New Yorker alleged that the project’s broker, South Pole, had “sold millions of credits for carbon reductions that weren’t real” and quoted CGI’s owner as acknowledging illegal money transfers.

Last month, the registry announced the conclusion of the first stage of that investigation: Due to errors in estimating the baseline — the amount of deforestation that would have occurred in the absence of the project — Verra had issued around 15 million more credits to the project than it should have. 

Carbon-neutral claims

The news presents a dilemma to companies that purchased credits from the project and used them to make emissions claims.  

  • Volkswagen retired more than one million Kariba credits in 2021 and 2022, at least some of which were used to certify its ID. Buzz and ID. Buzz Cargo vehicles in Europe as carbon neutral. 
  • Nespresso used almost 400,000 Kariba credits towards a 2021 carbon-neutral claim for its coffee capsules.
  • ProxiFuel, a Belgium-based subsidiary of oil and gas supermajor TotalEnergies, used Kariba credits as part of an initiative that allowed customers to offset the carbon footprint of heating oil. The company retired close to 190,000 credits between 2021 and 2023.
  • Private-jet rentals company VistaJet, which offered Kariba credits to customers interested in compensating for emissions associated with their travel, retired more than 150,000 credits between 2020 and June 2023.

More than one purchaser also continued to use Kariba credits after the scandal broke, most notably Forum Entertainment, operator of the 17,000-seat Kia Forum in Los Angeles, which retired 22,000 such credits this past February. (Forum Entertainment did not return a request for comment.)

The status of those credits, and by extension the claims they were used to make, is now unclear. Verra did not designate specific credits as having been issued in error. Instead, the registry said that all retired credits remain valid and has asked CGI to compensate for the over-issuance by canceling an equivalent number. 

“Verra has confirmed to us that the status of retired units, such as those used by Volkswagen, will not change, and no action is required from stakeholders who have already retired them,” said Ruth Holling, a Volkswagen spokesperson. 

TotalEnergies declined to comment on steps it would take in connection with Kariba credits it has retired, but added that it stopped using them after the New Yorker article appeared and has asked Verra to cancel the unretired Kariba credits it holds. Nespresso and VistaJet did not return requests for comment. 

Contested compensation

Still, it’s unclear whether CGI will fulfill Verra’s compensation request. CGI has asked to see the data behind the investigation and called for a moratorium on compensation in the meantime. The company has withdrawn the Kariba project from the registry and does not have other active projects with Verra, meaning it would be required to purchase Verra credits from other developers, potentially at a cost of millions of dollars. 

“Verra has put forward its plan for what it wants other people to do, and the main party, CGI, which is 100 percent necessary to achieving that plan, has indicated they’re not currently satisfied with that,” said Danny Cullenward, a senior fellow with the Kleinman Center for Energy Policy at the University of Pennsylvania. “So we are still in limbo.”

That limbo could have legal consequences. Several large companies, including Apple and BP, have lost court cases in Germany that focused on the quality of credits used to satisfy carbon-neutral claims. In the U.S., Delta Air Lines, Clif Bar and the tobacco company R. J. Reynolds, which sold “carbon-neutral” vapes, are the subject of related litigation. Verra’s conclusion that excess credits were issued, combined with the lack of an immediate remedy, could open the door to new cases focused on carbon-neutral claims that relied on Kariba credits.

Market safeguards

Verra’s investigation has also prompted carbon markets experts to question current safeguards. The registry says its role is to set and enforce standards, not to get involved in issues of commercial responsibility, which it sees as resting with project developers and credit buyers. Some would like to see Verra take more of that responsibility. The registry maintains a “buffer pool” of credits that it holds as insurance against problems with credit integrity, for example, but says it would not be appropriate to use in this case.

“The buffer pool was never designed to compensate for over-issuance of credits,” a Verra spokesperson told Trellis. “Its purpose is to backstop reversal risks: for example, if forest loss or fire reduces the carbon benefits of a project after credits have been issued. In Kariba’s case, there are excess credits that have been issued that can no longer be corrected given the project’s withdrawal from the registry, which we are addressing to remedy separately.”

Other buffer pools, such as those maintained to protect California’s market for compliance carbon credits, can be used more broadly, noted Grayson Badgley, a research scientist at CarbonPlan, a nonprofit that analyzes climate solutions. 

“These buffer pools can be really used for any purpose,” Badly said. The underlying premise of the pools, he argued, is that the registry will provide back-up if something happens to a credit that is outside the control of the buyer. “If there’s no one backing it up, then I think the whole thing unravels really quick.”

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California’s heavy metal disclosure bill puts vitamin brands on notice

Prenatal vitamins deliver folic acid, calcium and other essentials, but they often include lead. The U.S. Food and Drug Administration doesn’t regulate these supplements, so manufacturers and retailers leave families guessing about heavy metal contamination.

That’s why scientists and consumer advocates have backed California’s first-in-the-nation bill that would require companies to test for and disclose the presence of lead, arsenic, cadmium and mercury in pregnancy pills, powders and gummies. Senate Bill 646 passed unanimously Sept. 13 without opposition and moved to the desk of Gov. Gavin Newsom.

If he signs the bill into law, it would take effect in 2027, effectively creating a de facto national standard for supplement makers and retailers, who don’t tailor their products to individual U.S. states.

Bad stuff for babies

The bill tackles the threats heavy metals pose to a mother and fetus during critical windows of development. No amount of lead is considered safe at any age. Exposure to it, as as to arsenic and cadmium, during pregnancy are connected to lower birth weight, body length and head size. Crossing the placenta to an embryo or fetus, these metals can result in lifelong health problems and learning disabilities.

That’s why backers of the bill expressed concerns about half of prenatal vitamins testing positive for trace amounts, in a 2023 study by the U.S. Government Accountability Office. Other tests revealed it in every brand tested. 

Business backing …

The only two businesses supporting the prenatal vitamins bill argued that it will build consumer trust, protect the lifelong health of newborns and even provide a competitive business advantage. Vitamin maker Ritual and diaper brand HealthyBaby lobbied for the passage along with nonprofits Consumer Reports Advocacy and the Environmental Working Group.

Testing requirements would level the playing field for businesses and even drive market growth, according to Ritual’s Chief Impact Officer Lindsay Dahl, who in April delivered a statement before the senate.

Ritual has built its identity around sharing the origins of its ingredients, sourced globally from Illinois to Italy. The Culver City, California, company already tests for and discloses heavy metals in its prenatal vitamins. However, Dahl acknowledged the law would add more work for her team.

… and the opposition

The Council for Responsible Nutrition, however, argues that such a law would prevent expectant parents from taking beneficial vitamins. The Washington, D.C., trade group’s more than 180 members include Abbott, Amway, Herbalife, Nature’s Way, Novonesis and Walgreen’s Boots Alliance.

“By forcing manufacturers to release test results to consumers without sufficient explanation, the bill risks convincing pregnant women that prenatal vitamins are unsafe, when the opposite is true,” said the organization’s President and CEO Steve Mister. 

“The danger is that women will either avoid supplements altogether or choose products stripped of critical nutrients like calcium, iron, magnesium and zinc simply to show lower heavy-metal numbers.”

That fear is legitimate, according to Katie Bond, partner at Keller & Heckman in Washington, D.C. Prenatal vitamins already reduce heavy metals below trace amounts also allowed in seafood, meeting state and federal limits. “So often when there’s a law targeting something with an ‘ick’ factor, like heavy metals, there are unintended consequences,” she said.

However, Michael Hansen, senior scientist at Consumer Reports, believes the industry takes a dim view of consumer intelligence. “If you want to use that logic, well, maybe you shouldn’t have that or other nutritional information on products, because it might scare people away,” he said.

“Ten years ago there was an industry sentiment of ‘No, don’t go there, because, No. 1, you’re going to scare people,’” Dahl said. “People are already worried about this issue, so why not give them the information that they need, is my philosophy.”

Because it’s impossible to completely eliminate heavy metals in supplements, being transparent about the reasons why has driven trust in Ritual’s customers, she added. Plus, third parties are already sharing unsophisticated product testing results on social media. 

“Why not have it be standardized?” Dahl said.

Baby food precedent

The bill follows a similar California law that went into effect in January, regulating toxic metals in baby food.

There’s no evidence those new rules have discouraged purchases by parents, according to Tom Neltner, national director of nonprofit Unleaded Kids. Instead, many companies use the transparency to differentiate their products from competitors, he said. “Why would a prenatal multi-vitamin be different?”

Vitamin brands, which already test their ingredients for potential hazards, appear concerned with the burdens of publishing results, according to Neltner.

To satisfy the baby food law, some companies published test data but blocked it behind obtuse logins, according to Hansen of Consumer Reports. The new prenatal vitamins bill was built to prevent that.

Transparency has created a positive business incentive for Ritual, according to Dahl. “When you have to show your work, suddenly as a company, the importance of trying to find lower contamination suppliers becomes important,” she said.

“It’s different than 20 or 30 years ago,” said Hansen of Consumer Reports. “The far-sighted company directors that run sustainability should be jumping on those things, being on the forefront of giving that information to consumers.”

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Get ready to weigh in on an overhaul of carbon accounting for electricity 

The Greenhouse Gas Protocol, which publishes rules used by 97 percent of companies that calculate and disclose their greenhouse gas emissions, is finalizing proposed revisions to how companies can report on emissions related to their electricity usage. 

The recommended changes will make it more complicated for companies — especially ones with smaller electricity loads — to claim emissions reductions by signing virtual power purchase agreements, a type of contract that has financed the addition of 100 gigawatts of clean electricity to the U.S. grid since 2014, according to those familiar with the proposal.

The existing GHG Protocol methodology, originally published in 2015, lets companies claim emissions reductions for electricity, categorized as Scope 2, by matching their annual consumption with power from renewable sources. 

The revision being prepared for public comment, drafted by a technical working group and approved over the summer with modifications by the GHG Protocol’s Independent Standards Board, favors requiring companies to match their electricity loads on a much stricter hourly basis using local renewable sources on the same grid as the company’s original consumption, according to those with knowledge of the process.

“The most concerning element of this proposal is the lack of procurement options that would support hourly matching for buyers of our size,” said Jay Creech, manager of net zero for retailer REI Co-op, commenting about what is known publicly. “Even now, an organization as large and sophisticated as the co-op may struggle to access corporate procurements, which often have a minimum offtake of more than double our annual electricity need.”

Work in progress

The GHG Protocol hints that it will exempt smaller organizations from the strictest new requirements in a blog published Sept. 29, allowing companies to take the approach that is most feasible for its individual circumstances. The organization is also considering a legacy clause for existing contracts, which is important for the deals companies are scrambling to close before U.S. tax incentives go away in July 2026.

The standards body hasn’t made the details for either of those ideas public, but it plans to present various options when it opens a 60-day period for public feedback. The GHG Protocol plans to start soliciting feedback in October, but a spokesperson declined to share that date. Revisions to the current draft will be circulated in 2026, with a final version anticipated in 2027.

It will be several years before the changes take effect, but corporate sustainability professionals and renewable energy financing experts said the proposed revisions will make it more difficult to justify investments in long-term power purchase agreements at a time when the U.S. market already has been hobbled by tariffs and increasingly hostile federal policies.  

“While we all share the goal of a 24/7 clean energy future, our focus now must be on the path forward,” said Mike Matterra, director of corporate sustainability and ESG officer at Akamai Technologies, referring to the push for a method that more accurately reflects a corporation’s investments in renewable electricity on a local basis. “We must champion an organic evolution of our clean energy resources by deploying them where they can have the greatest impact — on our dirtiest grids — to make our 24/7 goal a reality.”

A separate proposal that would provide a way for companies to be recognized for different sorts of deals, such as contracts that include energy storage technology or that add more solar or wind power on grids heavily dependent on fossil fuels, was referred to a different work stream with the GHG Protocol for additional discussion. 

That metric is no longer part of the Scope 2 revision process but ought to be, given the huge amount of renewable capacity that should be added to the worldwide grid each year to reduce emissions, said Miranda Ballentine, senior advisor with consulting firm Green Strategies. “We have to unleash markets, not hamper markets,” she said.

Unintended consequences

The GHG Protocol’s rationale for updating the Scope 2 rules “reflect a modern reporting landscape, evolving grids and closer scrutiny of claims,” according to the nonprofit’s blog. Market experts agree that an overhaul is warranted but worry that it will slow down project development at a time when renewable electricity adoption should be accelerated.

The Clean Energy Buyers Association, which sent a letter to GHG Protocol in May urging it not to make the revisions too strict, said providing more certainty around whether existing contracts will be exempt under the new rules is crucial for encouraging continued corporate investment in renewable energy over the next three years. 

“Our basic stance has not changed since we put the letter out, but circumstances have changed dramatically,” said the association’s CEO, Rich Powell, pointing to the decimation of U.S. tax incentives for solar and wind. “We continue to think this will do more harm than good, and risk shrinking the market.”

The new rules risk limiting market participation to an elite class of the largest electricity consumers, said Michael Leggett, co-founder of Ever.green, which facilitates corporate renewable contracts, and the author of an exhaustive document that outlines the potential impact of the proposed changes. 

Among his many points: Fewer than a dozen corporations, including Google, Ingka Group, JPMorgan Chase, Mercedes-Benz and Microsoft do hourly Scope 2 accounting today. Corporations play a critical role in project finance for grid-integrated projects that isn’t adequately considered in the current revisions, and by cutting out all but the largest buyers, “it could slow down, instead of speed up, addressing climate change,” Leggett said.

The current revision will motivate some corporate renewable buyers to move away from long-term contracts to instead buy renewable energy certificates from existing projects closer to their operations, which would slow new renewable additions supported by corporate offtake agreements, said Patti Smith, electricity decarbonization lead for advisory firm Carbon Direct. 

“Some feel it creates a deterrent to renewable energy investment by favoring locations that have greater sources of renewable energy and favoring the organizations that can site themselves near those sources,” she said.

Rising prices

The changes as proposed will “massively increase complexity around tracking and reporting,” said Roberta Barbieri, vice president of global sustainability, climate and water, at PepsiCo. It will also increase renewable contract prices for corporate buyers, since it will force them to mitigate electricity loads from facilities separately rather than aggregating them and negotiating a more favorable price, she said. 

This won’t affect PepsiCo’s immediate plans, but it comes at a time when a growing number of large companies including Apple, Mars, PepsiCo and Walmart have been negotiating contracts on behalf of smaller companies within their supply chains. Mars disclosed its latest such transaction Oct. 7, covering 100 small solar projects in Poland.

Contracts for solar and wind projects are already more expensive — an average of 4 percent since Republicans passed the One Big Beautiful Bill Act, which eliminates credits many companies were using to buffer their costs, said Patrick Swords, carbon and renewable energy advisor with consulting firm Anthesis. The price for unbundled renewable energy certificates, which many smaller companies use to claim reductions in Scope 2, are also on the rise.

“Companies who haven’t made commitments yet, you may see them think twice or delay making commitments at this point,” Swords said.

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Why it’s time to find a new term for ‘carbon neutral’

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Last year, the BBC’s “Panorama” aired a feature-length exposé on corporate “carbon neutral” claims. One of its most-circulated clips featured a secretly recorded conversation in which a consultant explained that after a company measures its carbon footprint, it can reduce its emissions by “one tonne” and then offset the rest to claim carbon neutrality. 

The consultant’s firm later claimed the clip was taken out of context, arguing it was contrasting a minimal neutrality standard with more rigorous net-zero frameworks. But the damage was done. For many viewers, myself included, it felt like the end of carbon neutral as we knew it.

But that moment didn’t kill the term; it simply signaled its decline. In recent years, the voluntary carbon market has evolved, with reforms aimed at making it bigger and better. The focus has shifted from “reduce a little, offset the rest” to higher standards of ambition, integrity and transparency. 

This is a good thing. But the real challenge now is replacing carbon neutral with a new, equally intuitive and widely accepted claim. Without one, we risk losing something important: the ability for companies to communicate their climate progress in terms that most people can easily understand.

How a useful catalyst became a crutch

Carbon neutral started as a catalyst for climate action. Two decades ago, early adopters such as the flooring company Interface helped popularize its usage, and in 2006 the New Oxford American Dictionary crowned it the Word of the Year. The appeal was obvious: measure, reduce, offset, declare neutrality — simple enough for any consumer to grasp. As Trellis recently reported, that simplicity mainstreamed early action and helped unlock real dollars for climate solutions.

But the very simplicity that made neutrality so communicable also made it brittle. It was never intended to be a hall pass for business-as-usual. At the same time, it was challenging to execute, especially the offset aspect. Investigations and lawsuits further eroded trust in the claim. Courts in Europe, including in a recent case involving Apple’s product marketing, have tightened the screws. New EU consumer rules will effectively prohibit offset-based carbon neutral claims for products starting in 2026 unless lifecycle emissions are actually zero. Brands took note and many are phasing out the term pre-emptively.

None of this should surprise us. What counts as robust climate ambition has grown up. We now expect science-based targets, credible transition plans, supplier engagement and transparent disclosures — alongside any use of high-integrity credits for residual emissions or beyond-value-chain mitigation. 

What we’re losing as the label fades

If you care about integrity of corporate climate claims, you should welcome the end of “reduce a little, offset the rest.” But it’s also true that we’re losing something: a claim that was sticky, marketer-friendly and increasingly recognized in the marketplace. Apple has hinted that ditching the language makes communicating climate action harder. The nonprofit Climate Neutral even rebranded, from a neutrality label to the Climate Label, shifting emphasis from offsets to funding emissions-cutting activities relative to a company’s footprint. That’s progress, but it also underscores the communications challenge we’ve created by retiring a term without offering a mass-market replacement.

Like it or not, simplicity sells. If we don’t give companies a short, truthful, testable and tellable way to explain credible climate action, we shouldn’t be taken aback when we hear that this is a significant barrier to action. 

Can ‘net zero’ fill the gap?

Perhaps, but we should be realistic. Net zero is more accurate and ambition-raising, yet it lacks the instant comprehension carbon neutral once enjoyed. It’s also increasingly guarded by gatekeepers such as the Science-Based Targets initiative and International Organization for Standardization, and it’s unclear where those bodies will land on corporate use of carbon credits. 

Meanwhile, claims such as “climate positive” and “carbon negative” carry much of the same baggage as carbon neutral. Organizations such as the Voluntary Carbon Market Integrity initiative are doing important work to codify credible corporate claims, but it’s not yet apparent if a single, sticky phrase that works for companies (because it resonates with consumers) will emerge. 

The good news is that businesses want to act. According to recent research convened by VCMI, businesses see a real opportunity to use carbon markets — alongside deep value-chain cuts — to meet their climate commitments and make progress toward goals. The takeaway: if we set clear rules and credible guardrails, there’s demand for action.

Three recommendations for where to go from here

1. Acknowledge the permanent critics—and move on. Some people will oppose any corporate claim until the world reaches global net zero. Their critique can be principled, but it’s not a basis for mass action. We should design claims for integrity and impact, not for unanimity.

2. Be rigid on substance, flexible on words. NGOs, standard-setters and regulators should set firm expectations for companies: establish near- and long-term science-based targets; ensure verifiable emissions reductions; develop credible transition plans; engage suppliers; maintain transparent accounting; and ensure that any credits used meet high-integrity standards with appropriate use cases (offsetting a portion of Scope 3 emissions). 

But we should be more pragmatic when it comes to communicating the journey to customers. Since we in the NGO world are not marketing experts, we need to work collaboratively with marketers to ensure the language is compliant, clear and persuasive. The standard should be truthful, testable and tellable.

3. Consider a second life for carbon neutral. In jurisdictions where credit-based neutrality claims for products are going away, we still need something consumers understand. And yes, this may mean being open to giving carbon neutral a second life in limited, rigorously defined contexts.

But if there’s too much baggage and countervailing momentum, we need a replacement that shares its virtues: short, sticky and easily understood. As any marketer would tell you, it’s hard to sell a “contributing to global climate action” watch. I believe the path to victory on climate will be paved, in part at least, by pragmatism and compromise.

Claims such as carbon neutral have an added value that contribution claims often lack: They invite closer scrutiny and this scrutiny fosters accountability, which in turn drives progress. The contribution framing (“our investments contributed to global net zero”) may be accurate, but it often lacks the scrutiny that comes with neutrality claims. Many see it as a softer business incentive that draws less attention. Recent research underscores this gap: contribution claims are stronger on integrity and legal defensibility, but the paper doesn’t identify a compelling business case that would make them attractive to companies. 

In contrast, neutrality claims have prompted greater accountability, attracting media, NGO and regulatory focus. This scrutiny has highlighted flaws, sparked introspection and accelerated higher standards of transparency and clearer rules for using credits appropriately. Ironically, if companies had consistently relied on contribution language, there would’ve been less oversight, less accountability and likely a slower path to the improvements we see today.

The path forward

The evolution of the voluntary carbon market is fixing much of the substance problem that neutrality papered over: higher standards, clearer guardrails, greater transparency and more consistency. Now we must fix the story. Killing the old approach to carbon neutral is the right call. Leaving nothing in its place on the claims front isn’t. We need every tool in the toolkit. And if we want more capital flowing into real decarbonization and high-integrity mitigation — especially for nature and communities that depend on it — we have to give companies a claim that regulators accept and customers grasp and respond to. That’s the assignment.

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DOE: ‘No decision has been made’ on defunding direct air capture projects

Federal support for two flagship megaton direct air capture (DAC) hubs designed to generate millions of credits for carbon markets has been terminated, according to a leaked list of cancelled grants.

The Department of Energy, which awarded the grants, denied the awards have been rescinded and said no decision about the projects has been made.

The Louisiana- and Texas-based projects are among the highest-profile carbon removal projects underway in the U.S. and were expected to eventually receive more than $1 billion in government support. The Louisiana facility, known as Project Cypress, is designed to remove 1 million tons of carbon dioxide from the atmosphere annually by 2030. 1PointFive, the developer behind the Texas facility, pegged the project’s annual removal potential at 30 million tons.

Both facilities would dwarf the largest existing direct air capture projects, which remove and store at most tens of thousands of tons of CO2 annually.

“We’ve missed an opportunity here to take a leap forward in terms of scale,” said Erin Burns, executive director of Carbon180, a carbon removal think tank.

Credit consequences

The decision to terminate initial grants of around $50 million each to both projects was first reported by Heatmap and Semafor.

“It is incorrect to suggest those two projects have been terminated,” DOE Chief Spokesperson Ben Dietderich said in response to an inquiry from Trellis. “No determinations have been made other than what has been previously announced,” he added, referring to an announcement made last week about other climate projects that would be canceled.

Heirloom, a startup involved in the Louisiana project, said it had not been told its grant would be canceled and Climeworks, another partner in the Louisiana hub, described the reports as “rumors.”

The move would, however, be consistent with the position of the Trump administration, which has dismantled major chunks of existing federal support for climate action since taking office. Uncertainty around DOE funding had already led to layoffs at Heirloom and the stalling of progress on a federally funded $35 million carbon removal competition.

Withdrawal of support for the DAC hubs would have repercussions for the availability of durable carbon removal credits. Heirloom has signed deals to supply credits to United Airlines Ventures and Microsoft, for example. 1PointFive is also contracted to supply credits to Microsoft and recently inked an agreement with JP Morgan Chase — but in those cases the credits will be supplied by the company’s STRATOS facility, a separate Texas project that is expected to enter service this year.

Ceding leadership

Smaller projects like STRATOS and Mammoth, a facility in Iceland operated by Climeworks, have been financed on the promise of future revenues from credit sales. This funding mechanism will continue to be used by project developers, noted Burns. But the end of federal funding for larger projects would mean “giving up U.S. leadership on direct air capture,” she added.

“The U.S. is really good at developing these technologies,” she said. “What we don’t always see is the benefit of actually building those technologies once they become commercial.”

“The U.S. is home to hundreds of carbon removal companies, but other countries are catching up fast,” said Giana Amador of the Carbon Removal Alliance and Ben Rubin of the Carbon Business Council, in a joint statement. “The U.S. DAC Hubs program, with $3.5 billion appropriated by Congress, was set to support the largest carbon removal facilities in the world and was intended to further establish American leadership in the sector. If funding for the [hubs] is cut, the door will be open for other countries to take up leadership of the industry, and claim the job creation and economic benefits of carbon removal.”

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PepsiCo and Etsy are trying a new way to track emissions reductions

Aldi, Etsy, Netflix, PepsiCo, REI and Weyerhaeuser are among more than a dozen companies testing a new methodology for disclosing the impact of climate initiatives, including replacing diesel vehicles and investing in low-carbon aviation fuel. 

The guidance comes from an independent group of greenhouse gas accounting experts, led by former sustainability pros from Netflix and Amazon and formally known as the Task Force for Corporate Action Transparency. Their tools, published in late September, are meant to complement other reporting frameworks. 

For example, rules from the widely used standards body Greenhouse Gas Protocol outline ways to report on actions to mitigate electricity consumption, which fall under Scope 2. They don’t address methods for discussing the impact of other activities aimed at reducing emissions such as insulating buildings, replacing diesel trucks with electric vehicles, reducing methane emissions from livestock and closing down a business unit as part of a merger. 

Those methods often relate to Scope 3, which covers emissions from a company’s business partners and customers. 

“I would underscore the idea that there has been an explosion of these instruments,” said Chris Davis, a former Amazon executive, interim director for the Task Force for Corporate Action Transparency. “The avenues for progress have outpaced the ability to talk about it.”

“Companies are becoming more sophisticated, and in trying to meet their targets, they are implementing various programs to reduce emissions in their operations and supply chains,” said Noora Singh, senior director of sustainability at PepsiCo. “Unfortunately, the current standards and approaches lack the level of detail and sophistication needed to reflect or record these activities in reporting.”

Common frustration

The lack of disclosure guidance threatens to stall the adoption of approaches emerging to support the adoption of technologies such as sustainable aviation fuel and zero-emissions vehicles. These methods allow corporations to “claim” the environmental benefits related to buying into specific projects or contracts, even if they aren’t directly using the services.

“Under existing standards, it’s unclear how companies can participate,” said Sam Brundrett, environmental impact lead at Etsy. “That ambiguity doesn’t just create hesitation; it threatens to stall action altogether precisely when speed and scale matter most.”

Etsy’s role as a marketplace makes it difficult to directly control emissions reductions, he said.

The Task Force for Corporate Action Transparency was born two years ago through informal discussions. “When I was at Netflix implementing and building our strategy, I wanted to start reporting on all these things we were doing, and I was looking for disclosure guidance,” said Alexia Kelly, now managing director of the carbon policy and markets initiative at High Tide Foundation. “There was no uniform guidance.”

The group’s initial guidance was written to stand up to third-party assurance by organizations that verify ESG disclosures. It includes:

  • Mitigation Action Accounting and Reporting Guidance, which outlines ways to disclose on initiatives not covered under GHG Protocol rules.
  • Target Accounting and Reporting Guidance, a framework for accounting for progress against voluntary climate targets. 

PepsiCo is particularly interested in using the methods for reporting on emissions reduction programs that don’t fall into Scope 2. “We have a number of initiatives, whether it’s upstream in our ag supply chain for fertilizer production, third-party transportation switching to alternative or electric vehicles or various on-farm practices, and it would be helpful to test all of these using that accounting document,” Singh said.  

What’s next

The group enlisted corporate reporting professionals to test its guidance in 2025 and 2026; it may add a few others aside from the dozen-plus companies already committed to the pilot, said Davis.

The task force also plans to solicit feedback through public consultation in early 2026, with a view to publishing updated versions of these documents late next year, Davis said.

The group is aligning its guidance to updates under way at the GHG Protocol, which is revising many of its rules as part of an extensive overhaul, Davis said. It is also in conversation with other standards bodies including the Science Based Targets initiative, the Integrity Council for Voluntary Carbon Markets, the Center for Green Market Activation, the California Air Resources Board and the Voluntary Carbon Markets Initiative.

“The hope is not that this becomes the definitive solution but rather that the established standards, once updated, will adopt some of the approaches proposed by [the task force] and incorporate them into official guidance,” said Singh.

“We want to inform existing systems and move forward,” Kelly said. “We just want this problem solved.”

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What you should know about the EPA’s plan to stop collecting emissions data

A foundational data source that shapes the work of sustainability professionals across multiple sectors will disappear if the Trump administration goes ahead with plans to scrap the Greenhouse Gas Reporting Program, critics of the move warn.

The program, run since 2009 by the Environmental Protection Agency, requires around 8,000 oil refineries, power plants and other industrial facilities to submit annual emissions reports to the agency. EPA administrator Lee Zeldin proposed scrapping the program last month, describing it as “nothing more than bureaucratic red tape.”

Sustainability professionals see it differently. 

“The Greenhouse Gas Reporting Program matters to everyone, not just the companies that report,” said Sean Hackett, senior manager for energy transition at the Environmental Defense Fund. “It’s the most comprehensive source of emissions data. It underpins investor confidence, regulatory oversight and supply chain accountability across the economy.”

“The corporate world has built sustainability and investment plans around all it does,” added John Milko, senior managing policy advisor at Carbon180, a carbon removal nonprofit.

Cascading impacts

Ending the program would trigger a cascade of negative impacts, they and others warn, because the program provides a standardized data set that feeds into work across the economy. This includes life-cycle assessments and product-carbon footprints, which rely on emissions data from facilities upstream in the value chain.

In construction, for example, companies building data centers and other facilities are increasingly demanding that low-carbon steel and concrete be used. “We want to move to a system that improves the calculations of that embodied carbon,” said Milko. “Shuttering the largest-scale program that is seeking to standardize that data is counterproductive to the sustainability goals of large corporations.”

The move also places billions of dollars of announced investments in carbon removal in jeopardy, including direct air capture projects and plans to capture and store emissions from industrial facilities. The economics of these projects rely on a tax credit known as 45Q, which was made more valuable in 2022. Projects totaling $77 billion in capital expenditures plan on making use of 45Q, but companies need to access data from the Greenhouse Gas Reporting Program to claim the credit. 

“Canceling the greenhouse gas reporting program means you can’t get 45Q,” said Julio Friedmann, chief scientist at Carbon Direct, a carbon management firm. “Whether this is intentional or accidental, it’s very bad. It will chill investment, cost time and money and impair trade.”

Increased costs and complexity

Zeldin framed his proposal as a move that would save businesses billions of dollars by cutting regulatory burdens, but experts warn of increased costs to businesses that report to the program. Companies would still need to collect emissions data to comply with state regulations, demands from investors and requirements from countries they export to. “Without that federal baseline, companies would face a patchwork of state and voluntary programs that would increase costs, uncertainty and complexity,” said Hackett.

Companies wishing to comment on the EPA’s proposal have until Nov. 3 to share feedback. To learn more before commenting, Trellis recommends the following briefings:

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3 ways companies can push clean energy forward despite federal rollbacks

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

President Donald Trump’s big tax and spending bill, along with a series of executive actions targeting climate and clean energy programs, are disrupting clean energy manufacturing, supply chains and deployment that had been surging this decade.

Notably, these actions include curtailing tax credits that had driven hundreds of billions of private dollars into clean technologies, making it more difficult to build new energy projects and stopping nearly completed projects in their tracks. These steps actually run directly counter to many of the Trump administration’s own economic and energy goals.

Instead of reducing electricity prices, the bill is projected to increase them by making the quickest-to-build and most affordable new power sources more expensive at a time of rising electricity demand. Instead of restoring America’s manufacturing base and supply chains, the slow deployment will undermine private investment into new clean tech factories planned across the country and their supply chains. And instead of positioning the U.S. to better compete in global industries, the bill effectively cedes key 21st century technologies such as batteries, electric vehicles and energy infrastructure to China.

While these issues have become unfortunate fodder in the culture wars, they were always economic. You can see that in the effort major businesses from across the U.S. economy made throughout 2025, as they pressed Congress to maintain clean energy incentives. And it’s why, amid rising energy prices and economic change, businesses should continue to advocate for clean energy policy that helps to meet energy demand and sustainably grow the economy. In this difficult political environment, climate and clean energy policy must focus on building up U.S. industry and innovation by advancing affordable, reliable, homegrown clean power. 

For sustainability professionals, this is an opportunity to better align key corporate functions with policy priorities and help guide your company’s support through the rest of this Congress. Here are some key policy areas where companies should advocate.

Extend and simplify tax credits

Trump’s big bill takes sharp aim at wind and solar power, rapidly phasing out tax credits for these energy sources if they don’t start construction by next summer or aren’t up and running by the end of 2027. At the same time, the administration has imposed unreasonable restrictions on many wind and solar projects and changed qualification rules, making it harder for projects to get started in time to claim what remains of the tax credits. 

These actions threaten to dramatically slow down deployment of wind and solar power — the most affordable and quickest-to-build energy sources — at a time when the nation needs all the energy it can get as quickly as possible to affordably meet surging demand.

Businesses should call on Congress to provide greater stability and a longer runway for wind and solar power. We need that affordable power to meet the increasing energy demand for data centers, artificial intelligence and new manufacturing facilities. Restoring the incentives will also support new manufacturing jobs as companies work to reshore supply chains to make these technologies in the U.S. 

As the general public and lawmakers from both parties recognize the need for new power sources to prevent skyrocketing utility bills and investments shifting abroad, businesses can play a powerful role in advocating for extended incentives and cutting bureaucratic red tape to accelerate the build-out of solar and wind power.

Make American transportation cutting edge

Congress is due to renew its every-five-year transportation infrastructure funding in 2026 to strengthen the nation’s roads, bridges, railways and more. Not only is this an opportunity to fund critical projects and repairs, but it also presents an opportunity to fully modernize U.S. infrastructure and the transportation systems that companies across the economy depend upon.

Businesses should call for this legislation to support jobs and innovation in industrial materials that are central to our infrastructure such as asphalt, concrete and steel. Incentives for cleaner industrial processes will further support investment and jobs that are already taking root across the country, positioning the U.S. to lead the world in building materials that are in growing global demand.

It is also a timely opportunity for companies that want greater access to electric vehicles to advocate for policies that expand access to them, and for the U.S. auto industry to secure policies that help it compete in a changing global economy. New investment in mining, processing and refining critical minerals would shape domestic supply chains for batteries, while further deployment of charging infrastructure would support wider-spread adoption of the innovative and cost-saving vehicles they are building.

Meet the economic moment with smart permitting

Red tape holds up investment, so meeting the nation’s surging energy demand and supporting domestic manufacturing will require smart policy changes that make it faster and easier to build. Businesses especially need new transmission infrastructure to reliably deliver affordable power, and the U.S. must also find ways to responsibly source our growing need for critical minerals. In each case, it will take reforms that make it more efficient to secure permits and increase certainty for businesses and investors as they take these projects on.

Bipartisan momentum for federal permitting reform has grown in recent years. While negotiations fell short in the last Congress, the need has only increased. Republicans and Democrats have a real opportunity to negotiate responsible reforms that support homegrown clean power and advanced manufacturing to meet the nation’s energy, economic, and national security needs. Businesses are well-suited and well-positioned to help bridge the political divide and make the economic case for action.

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Why Signet, the world’s biggest diamond retailer, wants your old jewelry

Signet, parent company of jewelry retailers Kay and Zales, streamlined its environmental, social and governance strategy in 2023 to focus on 11 goals rather than 44. 

Some commitments set just two years earlier, including a pledge to hit net zero by 2050 and a series of diversity, equity and inclusion goals, were dropped during the paring. The driving vision for the overhaul: set near-term targets for 2030 that were prudent and achievable, according to Signet’s sustainability team. 

“One of the benefits of this refinement is it helps the entire company be really focused on our roadmap for sustainability and be really clear,” said Anna Bryan, senior director of ESG reporting and communications at the $6.7 billion company’s planetary impact.

The shift is showing up in Signet’s employee retention rates, which are 20 points higher than the industry average for jewelry retailers, said Colleen Rooney, chief corporate affairs and sustainability officer for Signet. “We feel like it adds value to the organization in many forms,” she said. “It definitely attracts talent.”

Recycling and reuse

A dominant theme of Signet’s refined focus is responsible mining and sourcing practices, a longstanding priority for the co-founder of the Responsible Jewelry Council.  

The world’s largest diamond retailer is also prioritizing the use of recycled materials and incorporating more repurposed gems and precious metals into its new designs, a strategy also embraced by rivals Tiffany and Pandora, which has switched entirely to recycled silver and gold. 

The two-decade-old Responsible Jewelry Council is advocating more circular sources across the jewelry supply chain to reduce the environmental and human rights impacts of mining, including new standards introduced in February that apply to lab-grown diamonds. Signet is well on track with commitments requiring all suppliers to ado pits code of conduct (100 percent) and to be certified by the council (91 percent).

“With jewelry, ‘recycling’ is different than it is with other products since diamonds and gold don’t otherwise get thrown away,” said Paul Zimnisky, principal with research and consulting firm Diamond Analytics. “But as natural gemstones and precious metals get rarer, I think we will see more repurposing in this way. I think it will become more common.”

Signet hasn’t set specific goals for growing the number of jewelry collections that use repurposed materials, but so far it features six — more than 200 separate pieces — under the Zales, Rocksbox, Kay and Ernest Jones retail brands. It also resold 65,000 pieces collected from customers during its most recent fiscal year: Signet’s Zales, Kay, Jared and Diamonds Direct brands offer a store credit to those who trade in jewelry while upgrading to a new piece. 

The company has recovered 22,589 troy ounces of gold, 18,089 troy ounces of silver and 52,031 carats of diamonds, according to its 2025 sustainability report. The value of the recovered metals is at least $35 million.

“We are so very fortunate to work in an industry where the raw materials have value and can be resmelted, repurposed,” said Bryan. “It’s such an advantage when it comes to retailers that have products that don’t have a clear path or avenue for recycling.”

New emissions goals

Signet’s commitments for reducing greenhouse gases are nascent. Its emissions goals for the 2031 fiscal year were only set in March: a pledge to cut emissions from operations (Scope 1) and electricity use (Scope 2) by 11 percent, and a commitment to reduce the carbon footprint from suppliers (Scope 3) by 17.5 percent.

Signet uses an open-source target-setting and reporting methodology published by the Center for Sustainable Organizations, which executives said allow for quicker adjustments as market conditions or resource availability changes. 

“We got really acquainted with the methodology, and we have this ongoing communication with the operations team and with the real estate team about levers we can pull or actions we can take,” Bryan said. If the team wants to adjust its scenarios, it can do so more easily. “We can get quicker results than if we were working with an outside consultant and had to rebase or remodel.”

Scope 1 and 2 account for 78 percent of Signet’s reported emissions inventory for FY25; the data it includes for Scope 3 is narrow and includes waste from operations and fuel/energy-related activities. 

To reduce its electricity consumption, Signet is prioritizing energy efficiency conversions such as the installation of LED lighting in stores. It’s also seeking ways to build clauses related to the adoption of renewable energy into leases. That’s simpler to do for some brands such as Jared and Diamonds Direct, which typically operate in independent buildings. Signet is exploring ways to collaborate with other tenants in shopping malls, where Kay and Zales typically are located.

To cut its Scope 3 impact, Signet expects 85 suppliers doing at least $5 million in business with the retailer to start disclosing emissions and set annual reduction targets, practices required under updates by the Responsible Jewelry Council. The company said more than 40 percent of its supply chain uses at least some renewable energy in the manufacturing process. 

“Footprint details are difficult to ascertain for industries with deep and complex supply chains,” said Zimnisky. “However, the diamond and jewelry industry has made significant progress in the area in recent years. It is encouraging to see such a global supply chain work together in this way.”

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Net Zero Banking Alliance folds, marking a new phase for climate finance

After four years, the banking industry’s signature joint effort to advance Paris Agreement-aligned climate targets is no more. The roughly 120 members of the Net Zero Banking Alliance (NZBA) said on Oct. 3 they will stop work immediately.

Their decision was no shock to many watching the group contract over the past 11 months. The alliance had been on hold since Aug. 27 pending a collective decision about its fate.

But the permanent end sparked both outrage and resignation from activists, with some calling financial institutions cowards for folding to anti-ESG pressure by President Donald Trump and legal threats by Republican lawmakers. Other experts, however, insisted that the alliance’s closure reflects climate finance moving into a new, action-oriented stage.

Whatever the case, the blush of excitement had long worn off since the banking alliance launched in 2021 under the United Nations-backed Global Financial Alliance for Net Zero (GFANZ). At its peak, the NZBA included more than 140 members in more than 40 countries. In December, JPMorgan Chase triggered an exodus that resulted in departures by the biggest U.S. and Canadian banks, as well as HSBC, Barclays and UBS of Europe.

By January, the GFANZ umbrella group had restructured, weakening itself. Many of its eight sub-organizations lowered their original ambitions. (The Net-Zero Insurance Alliance disbanded completely in 2024.)

‘Doomed to fail’

“We won’t mourn the NZBA,” said Lucie Pinson of Reclaim Finance, a Paris nonprofit that lambasted banks for financing fossil fuels twice as much as it backs cleaner alternatives. “Like other financial alliances of its kind, it brought little — if anything — to the climate, and was doomed to fail. Its purpose was never to take real action, but to create the illusion of measures in order to ward off the risk of regulation.”

The group urged policymakers and regulators to force the issue — that is, to stymie the oil and gas industry while boosting sustainable alternatives. Over the past nine years, the biggest banks in the world have forked out $7.9 trillion to Big Oil, according to the Banking on Climate Chaos report that Reclaim Finance produced with the Sierra Club, Bank Track and other nonprofits.

“Senior bankers need to be far more courageous in this decisive moment for all our futures and must use their influence to push up standards for accountability on climate if we are to stand any chance of making the clean energy transition happen,” stated Jeanne Martin, co-director of corporate engagement at ShareAction, who called the banking alliance’s cessation “bitterly disappointing.”

‘Good news overall’

The NZBA’s contraction reflected an evolution from “collective action to collective learning,” according to Brian O’Hanlon, managing director of climate-aligned finance at the Rocky Mountain Institute in Washington, D.C.

For example, bank financing is beginning to tilt in favor of low-carbon energy, according to Bloomberg New Energy Finance in January. For every dollar in 2023 that fueled high-carbon fuels, 89 cents supported cleaner wind and solar or grid technologies, it noted.

The Environmental Defense Fund supports that view. “There has been a pivot away from aspirational target setting towards a focus on concrete projects and the complex financial mechanics needed to make them happen and scale them,” said Andrew Howell, head of research in sustainable finance at EDF, based in New York. “This is good news overall.

Falling by the wayside, per Howell: the idea that commercial banks might sacrifice returns for net zero.

“Climate finance, like other types of finance, needs to be delivered in a way that produces competitive risk-adjusted financial returns,” he said. “And the good news is that this is in fact happening across the economy.”

What’s left

“At least [the alliance’s] demise brings clarity: the institutions genuinely committed to containing global warming will continue to act,” added Pinson of Reclaim Finance.

Meanwhile, the guidelines and responsibility for banks to support the low-carbon transition remain the same, according to the Global Alliance for Banking on Values. It advocates for divesting from fossil fuels and financing renewable energy.

“It has always been the primary responsibility of banks to chart their own course in terms of impact and transparency,” said a spokesperson at the Amsterdam nonprofit, which represents more than 70 values-led banks. Those include Amalgamated Bank and Climate First Bank, which were two of the three remaining U.S. members of the NZBA. Areti Bank bank was the other.

Beneficial State Bank of Oakland, California, had aspired to join the NZBA. “With the alliance folding, we’ll lose critical opportunities for accountability and shared learning,” said Terra Nielson, the bank’s executive vice president and chief impact officer. With less guidance and coordination, major banks are focusing on the short-term headwinds rather than the long-term risks of propping up high-emissions industries, she added.

The Net Zero Banking Alliance will keep available its latest guidance framework public for financial institutions. The 20-page document advocates for banks to set Paris-aligned, near- and long-term net zero goals; to annually report on emissions related to their investments and other activities over a baseline year; to back up targets with science-based decarbonization scenarios; and to regularly align goals with the latest science.

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