Carbon neutral vs Net Zero emissions: the similarities that cause confusion
- Both goals look to balance the emissions output from a business or organisation.
- Both journeys will also begin by calculating the carbon footprint of an operation using carbon accounting. This involves calculating, measuring, and reporting on an organisation’s greenhouse gas (GHG) emissions. From company cars to electricity providers, every area of your business is assessed to measure its impact and create a total figure of emissions produced.
After that, however, the two targets become very different!
How to become a carbon neutral business
If your business wants to then become carbon neutral, it simply has to procure certified carbon offset credits equivalent to its measured footprint. It should also have a plan to reduce emissions.
Carbon offsetting involves funding external reduction projects, elsewhere in the world, by purchasing credits to offset the emissions you can’t eliminate yourself at that time.
A single carbon offset credit certifies that 1 tonne of CO2e has been avoided or reduced through the work of an international environmental project. So, if a business wanted to achieve carbon neutrality, it would need to buy enough credits from a verified source to counteract its carbon emissions.
Pros
- It can be a great way to start your sustainability journey and begin to make a difference in a short time scale.
- You can fund important climate action overseas, and leverage the work of external organisations.
- You can link your investments to progressing the UN’s Sustainable Development Goals.
Cons
- The EU has recently banned the term “carbon neutral” to avoid consumers confusing the term with corporate action to decarbonise their own emissions.
- In the UK, you could be accused of greenwashing if you don’t also document your progress towards net zero.
- It can be difficult sourcing high-quality carbon offset projects.
Examples of companies celebrating carbon neutral status
There are hundreds of companies working towards, or maintaining, carbon neutral status including Google, M&S and Sky Media.
To achieve its status, Sky Media made many a wide variety of sustainable commitments across its film and TV operations and funded climate action through global offset projects.
How to become a Net Zero emissions business
Becoming a Net Zero emissions business means meeting more rigorous carbon reduction guidelines. It’s also about delivering deep and rapid changes within your own value chain to reduce/eliminate your emissions. Essentially, your business must take the necessary action needed to reduce its own emissions and help the world reach Net Zero (a target set to limit global temperature rises to 1.5c).
Led by the standards set out by SBTi (Science Based Targets Initiative), you’d be required to reduce your emission outputs by 90% across:
- Scope 1 – direct emissions from sources you own or control.
- Scope 2 – emissions from purchased electricity.
- And scope 3 – indirect emissions such as business travel, commuting and your supply chain.
You’ll also focus on using carbon removal techniques to reduce your emissions, a process where more carbon is removed from the atmosphere than is emitted, rather than relying on carbon offsetting. Carbon removal techniques include carbon capture and storage or direct air capture. This may require investment in advanced technologies or nature-based solutions such as reforestation and ecosystem restoration.
Pros
- You’ll achieve greater emission reductions for your business.
- You’ll be shaping your business to operate as a Net Zero company for years to come.
- Your achievement is certified by the SBTi.
Cons
- There are set guidelines to meet (although you can pick your own timescale to meet them).
- It can require more rapid and deep change within your business operations (which could also be considered a pro if you’re committed to change).
- It can require more investment.
Examples of companies with Net Zero targets and robust action plans
Various organizations and industries are declaring their intention to reach Net Zero by 2050 or before.
Leading insurer, Aviva has committed to reaching Net Zero by 2040. It has already measured its own carbon emissions and those contributed by suppliers and investments; in Scopes 1, 2 and 3. Aviva has set science-based targets and is committing to developing detailed transition plans to not only support the decarbonisation of its own operations but drive change in the real economy.
Carbon neutral vs Net Zero emissions: the differences
As we’ve seen, while both carbon neutrality and Net Zero emissions are sustainability targets, there are key differences between the two.
Carbon Neutral
Approach
Carbon neutrality is a status you can reach no matter what level of emissions you’re omitting as a business. It allows a business to counteract the emissions it can’t yet avoid by investing in carbon reduction schemes elsewhere.
Time
Carbon neutrality focuses on achieving a balance between emissions and carbon, reduction measures, regardless of the time frame. It allows entities to offset their emissions by investing in projects that reduce carbon.
Techniques
Carbon neutrality focuses on balancing emissions through schemes that provide carbon offsetting for business. Carbon offset credits are sold through verification schemes such as Gold Standard in support of international, verified emission reduction projects. These can include work in rainforest protection, fuel-efficient cookstoves and renewable energy.
Net Zero emissions
Approach
Net Zero emissions are a long term target. It involves reaching a set reduction and removal target that will limit the temperature rises to 1.5c and protect our planet. Net zero will require business transformation, engagement with internal and external stakeholders, and sustained progress to remove emissions across the value chain.
Time
Net Zero emissions emphasise a more aggressive and long-term approach to addressing climate change. It’s about striving for an almost complete elimination of greenhouse gas emissions by 2050 at the latest.
Techniques
Achieving Net Zero emissions requires more aggressive reduction measures and more extensive use of carbon removal technologies. Carbon removal is a process where more carbon is removed from the atmosphere than is emitted. Currently, the most common forms of carbon removal are nature-based solutions such as tree planting or peat restoration.
The role of individual action and corporate responsibility in achieving climate targets
In the fight against climate change, both individual action and corporate responsibility are crucial. That’s why employee engagement initiatives play such an important role in achieving sustainable success.
As a company, the possibilities to make an impact include:
- Green investing, supporting sectors such as carbon reduction technologies and research.
- Choosing your suppliers and partners based on their sustainability efforts.
- Creating a culture that puts our planet at the heart of your business.
- Phasing out practices, products and equipment that harm the environment.
- Using your status or platform to inspire positive changes.
As individuals, we can:
- Contribute by adopting sustainable lifestyle choices (such as reducing energy consumption).
- Seek out companies, to buy from and work for, that are taking sustainable steps.
- Keep informed about sustainability practices, through the media we choose, and further the conversation where possible.
Feeling informed and inspired?
So, there you have it. Two climate goals with two very different stories behind them.
At Flotilla, we remain committed to urging our clients to make investments in top-tier carbon offsets as a crucial component of their net zero strategy. In light of the increasingly stringent regulations surrounding the term “carbon neutral,” we believe it is more appropriate to describe these investments as “contributing to global carbon neutrality” rather than directly associating them with a company or product’s operations.
