Buzzwords. They can be useful shorthand - until they start to overlap. Given the urgency to act against climate change, we must make sure climate buzzwords don’t conflict or cause confusion. Let’s consider two terms currently part of any CSO or sustainability-focussed CFO’s vernacular: carbon neutral and net zero.

Neutral about carbon

Carbon neutral is the narrower of the two, so let’s start there. Carbon neutrality for a business means the amount of CO2 you’re responsible for putting into the atmosphere is equal to the amount you’re taking out. So inputs = outputs. So far, so good.

Ideally, a good carbon neutral policy involves limiting the CO2 you’re responsible for emitting. That could be through using more environmentally friendly manufacturing means, electrifying your vehicle fleet, or installing solar panels on your building. However, in practice, it is optional on whether you first reduce emissions.

Even if you have reduced carbon emissions, you’re still likely to be emitting some CO2, so there are two ways to become carbon neutral.

1. Through Scope 4 reporting that can include avoided emissions - selling products or services which allow other people or organisations to reduce their CO2 footprint.
2. Carbon offsets - contributions towards projects which actively remove CO2 from our atmosphere. These are often approached with Carbon Purchase Agreements which hedge against price risks. All offset programs are not created equal, so look closely at what you invest in here - for example, do the projects bring benefits for local communities, biodiversity, and align with UN’s Sustainable Development Goals.

This approach may get you quick-wins on climate action, and action is important. However, for change that endures, buying your way out of the problem rather than addressing underlying sustainability issues is not going to decarbonise your business and supply chain to achieve long-term emissions cuts. Enter Net Zero.

Netting to zero

Two things that set net zero apart from carbon neutral are gases encompassed, and the role of offsets.

Gases encompassed

Achieving net zero (also known as climate neutral) encompasses all greenhouse gases (GHGs), like methane (CH4) and nitrous oxide (N2O), as opposed to just CO2. This may seem like a fairly trivial difference, but due to the differing impacts that these different gases can have on our atmosphere, aiming for net zero over carbon neutral can make a significant difference in your climate reporting.

This is why a modern carbon footprint typically uses CO2-equivalents. We compare the impact of different greenhouse gases to the impact of CO2, and come up with a metric determining how many kilos of CO2 has an equivalent impact to that of one kilo of a different greenhouse on the atmosphere over a given period of time (usually 100 years).

For example:

• One kilogram of methane has the same impact as over 29.8 kg of CO2, so it’s worth 29 kilos of CO2 equivalents. (That’s over a 100 year timeframe - over a 20 year timeframe, the factor is over 80 - Source IPCC AR6 )
• If you’re aiming for net zero and you produce 20 kg of CO2 and 5 kg of methane, you need to remove 169 kg of CO2 from the atmosphere.

Using offsets

Net zero is also more prescriptive in the attitude to carbon offsets. To be clear, at Getting to Zero we believe that regardless of whether you’re aiming for carbon neutral or net zero, carbon offsets should be your last resort. But if you’re going for net zero, ISO standards are very clear - offsets are there to cancel out residual GHG emissions, which means emissions that couldn’t have been cut down any other way. After you've done the work, your residual emissions might be less than 10%.

The Science-Based Targets institute has created the Net-Zero Standard with a framework on how to bring net-zero plans in line with the science. It includes four concepts.

1. Near term targets - rapid deep emission cuts (halve by 2030)
2. Long term targets (90% reduction by 2050)
3. Cancel residual emissions (permanent carbon removal & storage)
4. Scale up climate investments (in addition to emissions cuts)

It may seem like the more taxing option, but net zero is what you should absolutely be aiming for. It’s more comprehensive and captures the true impact of our emissions on the world around us.

Need to switch from a carbon-neutral to a net-zero policy? Book a planning workshop with Getting to Zero now and start planning a sustainable future.

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FAQs on Carbon Neutral & Net Zero

1. What is the difference between carbon neutrality and net zero?Carbon neutrality means that a business's CO2 emissions equal the amount it removes from the atmosphere, while net zero encompasses all greenhouse gases (GHGs), not just CO2. Net zero aims to eliminate all GHG emissions, including methane and nitrous oxide, and offset any remaining emissions.
2. How can a business achieve carbon neutrality?Carbon neutrality can be achieved by either reducing emissions or offsetting them through Scope 4 reporting or carbon offset programs. Businesses can invest in projects that remove CO2 from the atmosphere, such as reforestation or renewable energy initiatives, to offset their emissions.
3. What role do carbon offsets play in achieving net zero?Carbon offsets are used in net zero strategies to cancel out residual GHG emissions that cannot be eliminated through emission reduction measures. However, they should be considered as a last resort, and efforts should focus on reducing emissions first before relying on offsets.
4. How does net zero address the broader impact of emissions on the environment?Net zero takes into account all greenhouse gases, not just CO2, and aims to mitigate their impact on the atmosphere. By incorporating methane and nitrous oxide emissions into the calculation, net zero provides a more comprehensive assessment of a business's environmental footprint.
5. What are the key components of a net-zero strategy according to the Science-Based Targets institute?The Science-Based Targets institute recommends a net-zero strategy that includes near-term emission reduction targets, long-term goals for significant emission cuts, cancellation of residual emissions through permanent carbon removal and storage, and increased investments in climate initiatives. This comprehensive approach ensures alignment with scientific guidelines for combating climate change.

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