Logo - Business Development Bank of Canada - BDC
Climate leadership Article | 10-minute read

How to choose the right environmental certification for your business

Credible certifications can help drive your company’s progress on environmental goals
women looking at an ipad in a office

An environmental certification is when a third party assesses the performance of a product, process or model created or adopted by your business. Achieving an environmental certification requires a company to meet certain environmental criteria and standards. A third-party organization, government agency or industry associate may designate and/or issue the set of criteria used to measure adherence.

Some certifications are specific to companies’ greenhouse gas (GHG) emissions or food waste; others are broad, folding environmental criteria into holistic evaluations of business-wide sustainability efforts. Not all certifications have equal value. Some require a fee and surface-deep commitments, while others demand rigorous work and reporting.

The benefit is that environmental certifications can give you a competitive edge because they signal good environmental practices to customers, peers and stakeholders. They can also help you identify opportunities to reduce costs and optimize operational efficiency. As a result, the costs incurred in acquiring certification (for the audit and the paperwork process) may be offset by reductions in operating costs or improved reputation.

What environmental certifications are available for Canadian businesses?

Broader certifications like B Corp are designed to support comparability across sectors. Choose this type of comprehensive assessment if your company’s goals are to tackle environmental, social and governance (ESG) issues holistically, Product, issue or sector-specific certifications lets you focus on just one element of your business.

Here are some common and credible environmental certifications for Canadian businesses.

Widely applicable environmental certifications

  • B Corp—a designation indicating that a business meets high standards across three key areas: social and environmental performance, public transparency, and legal accountability. The certification must be renewed every three years.
  • ISO 14001—a standard that focuses on environmental management and helps organizations to establish, implement, maintain and improve their systems.
  • ISO 50001—an energy management standard that helps organizations to improve energy performance and reduce their energy costs, all while enhancing sustainability.
  • Radicle Climate Smart—to receive this, the company must follow a training program, complete a GHG emissions inventory and develop an action plan to reduce emissions.
  • 1% for the Planet—certifies that a business is contributing at least 1% of its annual revenue toward environmental causes.
  • Single-Use Plastic Free Certification (from GreenStep)—certifies that a business is taking internal steps to cut its reliance on single-use plastics. The certification is valid for only two years, after which the organization must reapply and prove that it has continued to make concrete steps to cut waste.
  • Climate Neutral—an independent climate neutrality label for companies and consumers. While it is primarily product-focused right now, all types of companies can participate.
  • GreenStep Certified—a green business certification that helps companies measure and get recognized for their current environmental performance and create an action plan for improvement.

Product-specific environmental certifications

  • Cradle to Cradle—evaluates the environmental impacts of products and materials, from production to disposal, and encourages the use of sustainable materials and design. This tiered certification requires recertification every three years.
  • Rainforest Alliance Certification—certifies that a certain ingredient was produced in a socially, economically and environmentally sustainable way.
  • Green Seal—certified products must meet requirements defined by the Green Seal organization, such as environmental management and reduced resource consumption. This certification covers a wide range of products, from household cleaning products to paints and sanitary hygiene products.
  • Global Organic Textile Standard (GOTS)—applies to textiles, particularly those made from organic cotton, wool and linen. Certification covers various stages in the life of the product, from cultivation/harvesting of materials to manufacture.
  • Forest Stewardship Council (FSC)—promotes responsible forest management, and is available for wood and wood-based products such as paper.
  • ECORESPONSIBLE—offered by the Council of Sustainable Industries (CSI), this Quebec-based certification rewards companies committed to following a circular economy model.

Industry-specific environmental certifications

Food and Beverage:
  • Feast On—audits Ontario food service businesses to certify that ingredients are sourced locally.
  • Canada Organic Standards—this certification is regulated by the Canadian Food Inspection Agency (CFIA). It ensures that a product complies with food safety regulations for organic products.
  • The Pledge on Food Waste—offered by Better Table, this certification helps restaurants and other food service businesses reduce their food waste and associated costs.
  • Ocean Wise—a seafood certification indicating that a product was sourced from an abundant species and harvested in a way that limits bycatch and mitigates negative impacts on the ecosystem it came from.
Hospitality and Tourism:
  • Sustainable Tourism (from GreenStep)—is aligned with internationally recognized standards and scores tourism businesses and destinations on their performance across more than 80 metrics related to their ESG impacts.
  • Green Key Global— this certification is aimed at hotels, conference centres and other establishments in the hospitality sector. To obtain this certification, companies must demonstrate a given level of performance in energy, water and waste management.

Top 3 benefits of certifying your business

Angela Nagy is the founder and CEO of GreenStep, a sustainability consulting and certification firm. Here are three key areas where she sees companies reaping the benefits of certifications:

1. Improving your business processes.

As a company works toward an environmental certification, it will inevitably streamline its business practices at the same time—such as by cutting waste or GHG emissions.

2. Elevating your brand and reputation.

You will be able to proudly display your credible certifications and publicly showcase your commitment to minimizing your environmental impact. You will stand out from the competition and demonstrate to your customers, employees, investors, suppliers and partners that you are serious about sustainability.

Some purchasers, like governments and other larger buyers, demand proof that their suppliers and contractors are meeting certain sustainability targets. Certifications such as ISO 14001 can help your company access these opportunities.

3. Future-proofing your business.

Certifications and the work they entail can also help your business protect itself from changes in the market. Nagy points to Canada’s plan to increase the federal carbon tax by $15 per tonne annually until 2030. By pursuing emission-cutting certifications today, you can get ahead of your competition and show you have a vision for the future of your business.

“Stakeholders don't just want to know what you're doing now, they want to know what your plan is to improve in the future,” Nagy says.

Navigating the certification process

“Getting certified doesn’t mean that you’re green and you’re done. This is just a step in a process of continuous improvement and learning as an organization,” says Nagy.

Nagy has helped thousands of organizations assess their performance and pursue certifications that boost their marketability while delivering positive and tangible results for the environment.

Here are her steps for the certification process.

1. Identify your business goals

A certification badge on a website or a product is just the tip of the iceberg: it’s the public representation of the significant work a company has put into bettering itself, but there is a lot of work to do behind the scenes.

Nagy says it’s important for a company to assess its environmental goals before committing to any given certification. Ask yourself, what do you actually hope to achieve?

Getting certified doesn’t mean that you’re green and you’re done. This is just a step in a process of continuous improvement and learning as an organization.

Companies can emerge from a certification process with a better understanding of their opportunities, improved operational practices, a clearer path toward greater sustainability—and a shiny badge to top it off.

A great amount of information can be obtained by surveying your stakeholders—staff, clients, even your communities—to identify areas where your business can make real and positive differences to its operations and impacts.

“Ask yourself what your goals are in those areas and identify the actions needed to achieve them,” Nagy says. Then, find a certification that will guide your progress.

A good certification should take some work. We want some rigour in the assessment process, and we want someone to check our answers and challenge us on our responses.

2. Pick a credible certification

“Consumers are becoming much more savvy. They’re really looking into the credibility behind certifications,” Nagy says. When a sleuthing consumer finds a company boasting a certification that requires little or no proof, and has weak standards, then accusations of greenwashing are sure to follow.

“Make sure that you’re associating your organization with certifications and badges that you’re confident have a high level of credibility.”

Here are some basic questions you should ask yourself to get a sense of any certification’s weight and credibility:

What do they ask of you?

Generally, the quicker the certification process is, the less credible it is. That’s because thorough certifications—ones that represent the legwork a company must do to achieve a given standard—require applicants to submit and demonstrate their work, such as on emissions metrics or waste-cutting practices.

What are its criteria based on?

A reputable certification should be able to show applicants how it determines its standards and which expert bodies back up its criteria.

What follow-up exists?

Certifications that require ongoing reporting from a company, even after they have been granted a badge, are typically more credible because they demonstrate that a company takes its goals seriously and didn’t just pay an annual fee to get a marketing boost.

How much does it cost?

As a rule of thumb, the cheaper the certification, the less rigorous it will be. That’s because in-depth options will involve more work from the certifiers: things like discussions with assessors, reporting requirements and periodic check-ins.

Broad or sector-specific?

Some may choose to take a broad approach and start with a certification like B Corp. Others may want to zero in on a certification that is more product or industry-specific. “There’s no one-size-fits-all approach,” Nagy says.

3. Start small and set benchmarks

“It takes a long time to boil the ocean,” Nagy says, referring to ambitious companies that want to jump in with both feet at first to become more sustainable.

Instead, she recommends starting small, with goals that are SMART—that is, specific, measurable, achievable, realistic and time-bound. This results in an organized and measurable approach, where everyone understands the company’s goals and can track their progress towards them.

Having a clear understanding of how its current practices line up against its goals helps a company separate SMART goals from aspirations that will take more time and money to achieve. That’s where certifications can help, too. Because many certifications include initial assessment stages, they can help companies establish a baseline for a given issue and plot out an action plan to improve.

For example, certifications like B Corp offer free assessment tools that companies can use to gauge their standing on metrics related to sustainability, including green and environmental metrics.

4. Avoid common “greenwashing” pitfalls

Not all certifications are equally recognized by stakeholders, so it’s important to choose a credible certification. By not making an informed choice on a certification, businesses leave themselves open to accusations of greenwashing by consumers who are increasingly savvy about companies and certifiers that can’t back up their claims.

Some rules of good practice include

  • Use certifications that have been verified by an independent third party.
  • Do not create your own certification to affix to your products.
  • Do not use vague terms such as "eco-responsible" or "green" with no direct reference to the company's actions.

How much do green certifications cost?

Fees for certifications can also vary widely, often depending on a business’ size and sector. Here are some examples:

  • B Corp costs an upfront application fee of $250, plus annual fees of US$2,000, for businesses with gross annual revenue under US$499.9K. Equity pricing, based on revenue, is available for companies owned by people from underrepresented groups, including Black and Indigenous people, women, veterans, LGBTQIA+ people and persons with disabilities. The fees get higher as your gross annual revenue increases—up to US$50,000 a year for companies with annual revenue over US$750M. For the most up-to-date costs, use the fee calculator.
  • Cradle to Cradle’s fee structure is more complex. First, there is the annual community fee, which varies depending on an applicant’s gross annual revenue (e.g. US$1,800 for a company under US$10M gross annual revenue). Beyond that, a company must also pay certification fees for each product or product group it wishes to certify: US$3,600 for a certification application, and US$2,000 for recertification every two years.

Get started on certifying your business today

Although environmental certifications require investments of time and money, if chosen wisely, their benefits can make them worthwhile.

Impactful certifications can help you build a more sustainable business, attract customers and employees and also demonstrate to your stakeholders that you are serious and committed toward sustainability and the environment.

And if you’re struggling with where to start, BDC can help you set goals and pick certifications that make sense for your business.

Your privacy

BDC uses cookies to improve your experience on its website and for advertising purposes, to offer you products or services that are relevant to you. By clicking ῝I understand῎ or by continuing to browse this site, you consent to their use.

To find out more, consult our Policy on confidentiality.