Climate accountability organisation Action Speaks Louder warns that carbon accounting methods being considered by global standard setters could let brands make misleading environmental claims about their products.
The new report examines how emerging climate accounting mechanisms – including mass balance accounting – could allow brands to market products as “low-carbon” without making any corresponding physical changes to those products. Croc’s flagship Classic Clog is included as a central case study.
The report arrives days after the UK Advertising Standards Authority banned ads from Adidas, Uniqlo and Calvin Klein over “recycled” claims. It argues that the same gap between marketing claim and physical reality runs far deeper through corporate climate accounting.
What is mass balance accounting?
Mass balance accounting and “insetting” allow companies to allocate low-carbon attributes across products and supply chains, even where the physical low-carbon content of a specific product may be minimal or entirely untraceable. According to the report, these mechanisms carry many of the same legal and credibility risks as carbon offsetting, but with even less transparency.
Despite this, mass balance and insetting are currently being considered for inclusion in revisions to the Greenhouse Gas Protocol (GHGP), the world’s leading corporate climate accounting standard, used by thousands of major companies globally. Action Speaks Louder warns that the next generation of climate accounting rules — including revisions to the GHGP, Science Based Targets initiative (SBTi), and ISO standards — could enable misleading product-level climate claims at scale, undermining the credibility of corporate emissions reduction commitments more broadly.
“Like offsets, insets create legal risk for companies using them to make vague sustainability claims,” said Laura Kelly, Strategy Director at Action Speaks Louder. “Consumers are left with no way to tell if they are buying a genuinely low-carbon product, or paying for an accounting trick that allows big polluters like Exxon and Dow to carry on business as usual.”
Key findings:
- Mass balance insetting is increasingly being used across supply chains to market products as low-carbon by reallocating low-carbon “credits” between materials and products.
- Products marketed using mass balance accounting can claim significant low-carbon content even where the actual physical low-carbon composition may be close to zero.
- Companies may then count these claims toward Scope 3 emissions reductions, even where no traceable physical emissions reduction has occurred.
- Major corporations — including ExxonMobil, Dow Chemical, LyondellBasell, Nestlé, Mondelez, and Crocs — are benefiting from the sale of mass balance-attributed products, in some cases at premium prices.
- ExxonMobil and Dow Chemical have actively lobbied for the inclusion of mass balance and insetting within the GHGP, SBTi and ISO frameworks, raising concerns about industry influence over the standards that govern their own claims.
For more information, please download our report: From Offsets to Insets: New Developments in Corporate Climate Greenwashing.
Note to editors
Action Speaks Louder is a not-for-profit organisation galvanizing people around the world to hold major corporations to account for their impacts on the climate crisis. Action Speaks Louder strategically pushes companies to live up to their climate commitments as part of the movement to transform the global energy landscape.
For more information or interviews, please contact bea@speakslouder.org (+34 638 22 11 54) or josh@speakslouder.org (+34 653 91 93 99)