Most U.S. Consumers Don’t Know What ‘Carbon Neutral’ Means

As the world runs out of time to prevent the worst effects of climate change, brands have come under pressure to reduce the pollution generated by their operations. Some, including major names like Mondelēz International Inc. and Mars Inc., have designated their products as “carbon neutral” to signal a sense of environmental responsibility. The label indicates that, whatever emissions were released in the creation of the product, the brand compensated for their harmful effects by purchasing “offsets,” or donations to projects that reduce emissions  such as by planting trees or sequestering carbon. 

While carbon-neutral labels may come from a genuine desire to be sustainable, they can obscure a product’s true effect on the environment, according to Doug Stephens, founder of Retail Prophet. 

“Offsets are rather murky,” said Stephens, who has worked with brands like Walmart Inc., Google and LVMH Moët Hennessy Louis Vuitton SE as a retail futurist. “If you say your product is carbon-neutral, does that include your vendors and your vendors’ vendors? Or are you restricting it to your own activities? It needs to be analyzed in an end-to-end way.” 

What’s more, “carbon neutral” does not appear to mean much to most Americans. New Morning Consult data shows that, while consumers are concerned about climate change, familiarity with the concept of carbon neutrality is not nearly as prevalent. 

• While a plurality of U.S. adults (41%) correctly identified the definition of carbon neutrality (“a company that produces carbon emissions but uses carbon-offset programs to remove as much carbon as they produce from the atmosphere”), a clear majority (59%) either incorrectly identified the term (by choosing either “a company that does not generate any carbon emissions during their manufacturing, provision or operational processes” or “a company that produces carbon emissions without using any programs to offset the carbon emissions they produce”) or said they did not know what it meant. 
• Even among self-identified environmentalists (those who said they have changed their behavior “some” or “a lot” due to concern about climate change), less than half (45%) correctly identified the meaning of carbon neutrality. 

• A majority (52%) of Americans said they have not seen a carbon-neutral label, and an additional 14% indicated they never try to buy those products. 
• Among environmentalists, awareness was only slightly higher, with about half (49%) saying they’ve never seen the designation.
• About 1 in 4 U.S. adults (23%) said a product having a label that shows it’s environmentally sustainable is a major factor in deciding what food or beverage brand to buy over another. More than 3 in 4 Americans (77%) said reasonable prices are a major factor. 

A question of values 

Stephens said brands should think of carbon neutrality — and sustainability more broadly— as a part of brand identity, not just a selling point for marketing purposes. 

“The brands that are indeed purpose-driven, that put social and environmental causes at the heart of their brand, have a greater chance of securing customer loyalty,” he said.

The July 26, 2022, survey was conducted among a representative sample of 2,210 U.S. adults, including 1,358 self-identified environmentalists, with unweighted margins of error of plus or minus 2 percentage points and plus or minus 3 percentage points, respectively.