Both have merits, but differentiating between the two presents an important distinction
Growing concerns about the climate crisis have changed the way we speak about the health of our planet, bringing new language into the global lexicon. While environmental conversations before the millennium focused primarily on the rainforests and the o-zone layer, today we’re more used to discussing the importance of “sustainability”, “carbon neutrality”, and of course, “Net Zero”.
And in the fight against the climate crisis, knowledge is power. Understanding vital eco terms eco claims and measures is key to mitigating environmental damage and taking appropriate action. The terms ‘carbon neutral’ and ‘net zero’ are often used interchangeably, but there are key distinctions between the two which are important to address.
What is the difference between carbon neutral and net zero?
Ultimately, the global task for both organisations and individuals is to reduce carbon emissions in line with the carbon budgets set by the IPCC and aligned to limiting global average temperature increase of 1.5 degrees. To do this, we need to focus upon the reduction of carbon emissions to a point where any residual emitting activity is sequestered through natural or man-made carbon sinks, a point of Net Zero.
Following the publication of the Science Based Targets Initiative Net Zero Corporate Standard in 2021 the focus upon carbon reduction has become very clear.
Net Zero, under the SBTi corporate standard requires organisations to remove almost all their emissions in order to achieve a “Net Zero” point, with the residual emissions counteracted through certified carbon removal offset projects.
In keeping with the GHG Protocol the standard also requires that the reduction is made across the organisation value chain, otherwise referred to as Scopes 1, 2 and 3. This means that the Net Zero term refers to an organisation reducing almost all their emissions, and then compensating for the residual emissions through certified carbon removal projects. The need to achieve reductions rather than offsets means that organisations will typically set a target date, as soon as possible before 2050 to become Net Zero.
Meanwhile, carbon neutral allows organisations to achieve a point of “carbon neutrality” much earlier by making investments in carbon offset projects to counteract the emissions from the organisations activities. These projects can include emissions avoidance activities and carbon reduction activities. It also doesn’t usually prescribe to a specific reduction trajectory, and is less regimented in its reporting boundary.
In carbon neutrality, the inclusion of Scope 3 and other wider value chain emissions is encouraged but not mandatory. Whilst many organisations have a wider intention to reduce their emissions over time, this is not a requirement in order to achieve certification, and thus carbon neutrality can be achieved in a much shorter timeframe through investment in offset projects.
What does it mean to be a carbon neutral business?
Taking steps to become a carbon neutral business requires a balance between the reported emissions of the organisation, and equivalent investment in carbon offset projects. While this of course involves taking steps to reduce the amount of greenhouse gases produced, it also usually includes investing in certified projects as a means to immediately compensate for the emitting activity.
Forests and oceans are prime examples of carbon sinks, typically absorbing and storing more carbon from the atmosphere than they emit.
Projects to remove, reduce or avoid emissions are certified and funded through the carbon offset mechanism through which organisations can purchase an offset equivalent to a metric tonne of carbon. By investing in sufficient offset projects to match the organisations total emitting activity a Carbon Neutral position can be achieved in the immediate of short term.
On an individual level, using public transport, limiting food waste, and recycling packaging can contribute to a carbon neutral lifestyle. Carbon emissions reporting can give businesses the holistic view needed to determine how much work they have to carry out to achieve carbon neutrality.
How does this differ from Net Zero?
A Net Zero position requires an organisation to have reduced almost all of its emitting activity and sequestered the remaining emissions through certified carbon removal projects. Under the Science Based Targets Initiative the limit on these offset projects is set at ten percent of the initial total.
Net Zero is therefore a point in time when an organisation will have made the necessary reductions right across the value chain. Inclusion of indirect emissions in the ultimate metric means that organisations right across business sectors need to collaborate with their customers and suppliers in order to achieve Net Zero. Only by incorporating decarbonised products and services will an organisation ultimately achieve the Net Zero goal, which in turn brings more and more organisations into the initiative.
The NHS, Tesco and Microsoft are good examples of where an organisation has set a Net Zero goal and is now actively engaged with the supply chain to achieve it.