Promoting an organization's green power use is a key leadership principle. Organizations should also understand that making unsubstantiated and inaccurate claims about the use of green power could lead to legal and financial risks and damage an organization's reputation.
Organizations need to make credible claims and substantiate them through REC ownership and retirement. Organizations can follow the below guidance in making environmental claims
- Ensure contractual right to make claims
The ability of an organization to say it is using renewable electricity is contingent upon its ownership of the energy attributes associated with the electricity it consumes. In the United States, RECs represent these energy attributes.
An organization must ensure it has exclusive rights to the RECs associated with its electricity consumption to make environmental claims.
- Retain ownership of the RECs from self-generation supply options
Ownership and/or operation of a renewable energy project on-site does not automatically guarantee claims to the associated RECs unless the organization retains them. If an organization sells the RECs from its project or an organization does not acquire the RECs from the owner of an onsite renewable energy project, it must purchase replacement RECs to support its environmental claims.
For more guidance on GHG guidance – please read the Center for Corporate Climate Leadership’s document on Indirect Emission from Purchased Electricity (pdf).
- Limit claims to match the scope of the purchase.
If an organization is buying green power to meet only part of its energy consumption or just for a subset of the organization, then the organization's environmental claims must also accurately reflect this scale or scope of the green power purchase.
- Retire the RECs associated with green power purchases to prevent double claims.
Making an environmental claim requires the retirement of the REC. Once the organization makes a green power purchase claim, it must retire the associated RECs (or ensure the RECs are retired on its behalf). The organization can consult with its green power supplier or tracking system representatives on the formal REC retirement options.
- Buy certified green power to support claims.
Organizations should strive to buy green power products that are certified and verified by independent third-party entities. Certification provides credibility and affirmation of the environmental benefits associated with a green power purchase.
- Limit claims to emissions associated with purchased electricity (Scope 2 emissions).
Organizations should be cautious when making claims related to emission reductions. Purchase of green power reduces emissions associated with purchased electricity. This is particularly useful in reducing market-based accounting of scope 2 emissions in a corporate GHG inventory.
- Use the terms "REC" and "offset" correctly in claims.
RECs are not the same as offsets. Knowing the differences between instruments like RECs and offsets is critical to deciding how both may be useful to your organization.” For more information on these two market instruments, please read the GPP document on RECs vs Offsets (pdf).
- Be able to substantiate claims.
Valid environmental claims have a credible basis. Organizations using renewable electricity can prove its able to make a claim through legal ownership of energy attributes or RECs.
- Avoid project claims of "additionality."
Despite the frequent claims of additionality to imply project causation or reducing emissions, organizations should avoid using the terms "additionality" or "additional" in the context of green power use and renewable energy project development. Additionality is more complicated that than adding new renewable energy capacity. Even if the consumer’s intervention caused the project to be built, causation alone is not sufficient to meet the additionality tests associated with GHG project accounting. Organizations should instead describing their leadership in using renewable electricity and the impacts of their purchases. For more information, please read the 2018 WRI report entitled “Describing Purchaser Impact in the US Voluntary Renewable Energy Markets” (pdf).
- Follow available market guidance.
The FTC provides important market guidance for environmental claims included in labeling, advertising, promotional materials, and all other forms of marketing, whether implied or stated explicitly. Organizations should be familiar with this guidance. The FTC Green Guides cover all claims on environmental attributes for a wide range products and services across all organizational sectors.