• What Is a Climate Action Plan?
• Step by Step: Creating a Climate Action Plan
• Example of a Climate Action Plan
• Why it Matters for B Corp Certification
• Beyond the Plan

The last few years have been the warmest on record. Communities and nature are already suffering the widespread adverse effects of climate change, extreme weather events, and rising sea levels, with vulnerable communities disproportionately affected. The planet cannot afford delays or greenwashing – we must take climate action now.

To contribute to the global goal of limiting global warming to 1.5°C, B Lab Standards V2 ask companies to take action on climate. There are different requirements from smaller and larger companies, proportionate to their difference in resources.

To meet the CA 2.1 requirement of the B Lab Standards, smaller companies are expected to publish a climate action plan that includes time-bound targets and key actions to achieve them. The plan should be clear, publicly accessible, and aligned with the company’s management and decision-making processes. 

What Is a Climate Action Plan?

A Climate Action Plan outlines how a company will reduce its emissions and achieve its climate goals. B Lab takes a pragmatic approach for CA2.1 – while accurate and verified greenhouse gas (GHG) measurement is the gold standard, requiring it upfront would place a disproportionate burden on smaller companies. Most already have a clear sense of where their largest emissions come from and can begin taking meaningful action before their GHG inventory is perfect.

CA2.1, therefore, focuses on targets for GHG mitigation actions rather than mandating specific GHG reduction targets. These targets must be specific, measurable, achievable, relevant, and time-bound.  They  should directly address the company's most significant emission sources, even without formal measurement in place. Companies that do have the means to measure and verify their emissions are encouraged to set GHG targets accordingly.

A robust climate action plan should include, in a way that is proportionate to the company’s size and context:

• Clear, time-bound targets,

• The main emissions sources considered,

• Concrete actions to reduce emissions,

• Internal responsibilities or teams involved, and

• An approach for tracking progress over time.

A successful climate strategy requires continuous improvement and accountability. That is why the B Lab Standards require the company’s highest governing body to approve and oversee the climate action plan, and monitor its effectiveness.  

Step by Step: Creating a Climate Action Plan

1. Identify key sources of emissions within the company's operations and value chain.

   1. You are not required to conduct a GHG inventory –  however, if your company has the means, it is encouraged. In any case, many small to medium-sized  companies (SMEs) already have a good idea of their highest sources of emissions. If you do not, you can rely on:

      • Free, publicly available carbon calculators, like the one from the SME Climate Hub (available in English, Spanish, Arabic, French, Portuguese and Svenska)

      • Consider if Scope 1, 2 or 3 is most relevant for you. For most smaller companies the following emissions categories may be the most relevant:

• Purchased electricity (Scope 2)

• Business travel (Scope 3 - Category 6)

• Employee commuting (Scope 3 - Category 7)

• Purchased goods and services (Scope 3 - Category 1)

• Waste disposal (Scope 3 - Category 5)

• The bank the company uses for its accounts and employee pension funds (part of Scope 3 - Category 15)

2. Establish specific, measurable, achievable, relevant, and time-bound (SMART) performance targets.

   1. If you already have a (verified) GHG inventory, consider setting science-based targets to add further rigour to your climate action plan.

3. Establish specific actions to meet the proposed objectives. Consider areas, such as:

   1. Energy: switch to renewable sources, generate energy on-site, replace high-emitting fuels, and reduce overall consumption.

   2. Suppliers: prioritise suppliers with a climate strategy and emissions transparency; source locally where it reduces net emissions.

   3. Transport and logistics: shift to lower-emitting transport modes (e.g. cargo ship over air freight), optimize distribution routes, and implement recycling measures.

   4. Ways of working: enable remote work, incentivise public transit and cycling, reduce business travel in favour of video conferencing, and consider compressed work schedules to cut commuting.

   5. Products and business models: redesign products to reduce lifecycle emissions, develop low- or zero-emitting offerings, and support circular economy practices such as repair, reuse, and recycling.

   6. Finance: align investments, assets, and pension funds with the climate action plan; invest in emissions reduction and removal projects.

 Check resources, such as:

7. SME Climate Hub's Take Action Guide (available in English, Spanish and Arabic)

8. ISO Net Zero Guidelines (available in English, Spanish, French, Japanese and Russian)

9. Carbon Mitigation Guide (available in Spanish)

4. Allocate human, technical, material and financial resources for implementation.

5. Describe how the company will work with stakeholders.

6. Plan the actions according to priority and their feasibility in the short, medium, and long term. 

7. To be valid, the climate action plan must be formally approved by the company's highest governing body (Board of Directors, CEO, or General Management).

8. Publish the climate action plan on a website or other medium available to stakeholders (annual report, sustainability report, digital or printed brochures, sharing with local organizations, etc.). The climate action plan should be publicly available or easily accessible to external stakeholders. 

9. Implement, monitor and report progress

   1. Review progress against targets and performance indicators periodically and publicly report on your progress and actions taken (CA3.6).

   2. Update the action plan every three years.

Example of a Climate Action Plan

This case study is based on a small fictitious company. GreenGreen Farms is committed to supporting the global effort to limit global warming to 1.5°C above pre-industrial levels, in line with the Paris Agreement and the latest climate science. As a small agricultural business, we recognize both our responsibility and opportunity to contribute to a healthier, more sustainable future. This plan outlines our roadmap to significantly reduce our greenhouse gas (GHG) emissions and strengthen our climate resilience.

Governance and Approval: This plan has been formally reviewed and approved by GreenGreen Farms’ executive team as of August 15, 2024. Progress against the plan is reviewed quarterly by our leadership team and updated annually in our public Impact Report (available on our website).

Why it Matters for B Corp Certification

Having a Climate Action Plan aligned with the CA 2.1 requirement is essential to demonstrate that the company's commitments are not mere statements of intent, but a viable operational strategy. This B Lab requirement validates climate governance by requiring formal approval from the highest governing body and ensures technical feasibility through the explicit allocation of financial and human resources. It also ensures that the company remains relevant to climate science by requiring the plan to be updated every 36 months, mitigating the risks of greenwashing and strengthening transparency with stakeholders on its path to Net Zero.

Beyond the Plan

Companies are encouraged to take additional action for equity and to help accelerate progress towards the global goal. This may include:

• Ensuring a Just Transition within the Climate Action Plan: Understand which stakeholders your climate action plan may affect positively or negatively and which of your stakeholders are most vulnerable to the effects of climate change. Engage them and incorporate action in your plan.

  1. Resources: Introduction to Climate Justice for Business, B Lab Climate Justice Case Studies, Nature in Transition Plans, The Climate Justice Playbook for Business.

• Taking care of ongoing emissions: While working on addressing your own emissions, to accelerate the global emissions reduction you could invest in:

  1. Supporting GHG emission removals within or outside the company’s value chain. 

  2. Purchasing high-integrity carbon credits. These mechanisms can provide financial support to help decarbonize economies in the Global South (see also “Beyond value chain mitigation” in the Implementation Resources for CA2.1 in B Impact). Note that purchasing carbon credits is not a substitute for reducing your company’s GHG emissions.

• Supporting others in reducing their emissions.

  1. Identifying opportunities within your business model to develop climate solutions products and services to enable others to reduce GHG emissions;

  2. Helping your suppliers or other value chain partners with capacity building or tools to reduce their emissions.

  3. Supporting other climate change mitigation projects outside of your company’s value chain. 

  4. Funding Civil Society Organizations and grassroots organizations working on climate change mitigations, and supporting research and development of new carbon removal methods.

Taking climate advocacy actions at the national or international level to promote rigorous climate policies aligned with science.