Defining Sustainability Goals: Net Zero vs. Carbon Neutral, etc.

Carbon Neutral

Carbon neutral means that any CO2 released into the atmosphere from a company’s activities is balanced by an equivalent amount being removed.

Everything you do produces carbon dioxide. Being “carbon neutral” means that you, or the operations of your business, emit the same amount of carbon dioxide into the atmosphere that you offset by some other means. This means that you achieve a balance between emissions produced and emissions removed, resulting in a net neutral impact on the environment and no increase in the overall concentration of greenhouse gasses. Adding solar panels to your home, or switching to an electric vehicle are examples of things you can do to reduce your carbon dioxide output. 

Becoming carbon neutral doesn’t encompass all greenhouse gasses. However, it includes carbon dioxide, which covers 80% of the planet’s greenhouse gasses – and some sectors don’t need to be carbon neutral to limit contributions to warming.

Achieving carbon neutrality means that organizations must actively take action to reduce their climate impact and invest in emissions-reducing projects. It’s a serious commitment, a material investment, and a statement of prioritizing climate action

Climate Neutral

Climate neutrality combines an organization’s need to account for their greenhouse gas footprint and to establish a clear reduction strategy, ideally before offsetting unavoidable emissions. For companies, climate neutrality is a “point in time” statement, where historical emissions are measured and offset. 

Compared to carbon neutrality, climate neutrality places more of an emphasis on covering all GHGs beyond carbon, and includes climate impacts beyond GHG emissions, such as radiative forcing from aircrafts – often used to calculate emissions from business travel.

Net Zero

Net-zero, on the other hand, compels companies to more meaningfully reduce value chain emissions. Net-zero was formally defined in late 2021 by the Science Based Targets Initiative’s Corporate Net-Zero Standard. The standard states that net-zero must be achieved by abating at least 90% of emissions and that the remaining 10% may be reduced through permanent removals in a target year. In short, the title of net-zero requires actually getting rid of your emissions through efficiency, electrification, renewables, and other means. 

To achieve this goal, organizations must:

• Reduce: plan a trajectory to reduce emissions across your entire value chain. In addition to your longer term target to reach net zero emissions, you must also have a short-term target to reduce emissions in the next 5-10 years, in line with science.
• Compensate: become climate neutral by financing projects beyond direct corporate value chains to further avoid and remove emissions
• Neutralize: once emissions have reduced to close to zero levels, eradicate unavoidable residual emissions with carbon removals to achieve and claim net zero

By investing in smart climate solutions, companies can also achieve the interim milestone of climate neutral while transitioning towards net zero.

Climate Positive

Climate positive means that activity goes beyond achieving net-zero carbon emissions to create an environmental benefit by removing additional carbon dioxide from the atmosphere.

There are currently no official accounting frameworks that would define a corporate “climate positive” goal, but these claims should be made with great care.

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