From "meet our new carbon neutral packaging" to "we pledge to be a net zero company by 2040" – we're now seeing businesses use the terms 'net zero' and 'carbon neutral' on the regular.

But, unfortunately, they're often misused.

In fact, according to the UK Public Attitudes Tracker, just 5% of the UK public actually have an understanding of what net zero is

These terms actually have very specific definitions, but they're often applied pretty loosely by businesses. Not only can this be misleading to customers, it also leaves companies wide open to allegations of greenwashing.

So, let's define the two – and explore the significance for businesses.

What is net zero?

Net zero refers to a state where the greenhouse gas emissions entering the atmosphere are balanced out by emissions removed from the atmosphere – resulting in no net impact being made.

In practice, this means reducing emissions as much as possible, and neutralising any residual emissions using carbon removal. 

There are two key elements to note in this definition:

• The word ‘net’

• The use of carbon removals

The ‘net’ in net zero emissions

The Paris Agreement made net zero an official climate target, requiring members to ‘achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century’. 

It’s this idea of ‘balance’ which is key.

In theory we could reach zero emissions by reducing emissions in their entirety, so that zero greenhouse gases are emitted into the atmosphere. 

But this isn’t realistically possible, and definitely not on the timescale that we need. 

So, as well as deep emissions cuts we also need carbon removals to remove existing emissions from the atmosphere. 

Carbon removal – the 🔑 difference between 'net zero' and 'carbon neutral'

Net zero specifically requires that CO2 is removed from the atmosphere, at an equivalent amount to any remaining, unavoidable emissions made – meaning that any carbon credits purchased as part of a net zero commitment must be carbon removal credits, such as enhanced weathering, afforestation/reforestation, or direct air capture projects.

This is where mix-ups can happen with the use of the term net zero.

An individual, business, country etc cannot claim to have reached net zero emissions if they offset their residual emissions using emissions avoidance credits which prevent further emissions happening elsewhere, such as renewable energy, forestry conservation, or carbon capture and storage projects.

They would be ‘carbon neutral’ – but not ‘net zero’.

Take this example, for instance.

A company emits 2 tonnes of CO2 through transportation, whilst delivering a product from a warehouse to a customer’s home. They could choose to address that through:

• Buying 2 carbon credits from carbon removal projects – removing 2 tonnes of CO2 from the atmosphere and making their emissions 'net zero'

• Buying 2 carbon credits from emissions avoidance/reduction projects – preventing 2 more tonnes of CO2 being emitted and making their emissions 'carbon neutral'

So, to reach true net zero emissions we must first reduce emissions as much as possible, and then buy carbon credits from a carbon removal project (not an emissions avoidance or reduction project) to compensate for any leftover, unavoidable emissions.

What does this mean for businesses?

Understanding the true definition of net zero has two very important implications for how businesses approach setting (and communicating) their climate goals and targets:

• Be very careful when making 'net zero' claims – they must adhere to the definition above to avoid greenwashing
• Remember that net zero was set as a global climate target for governments – it wasn't designed for businesses so it may not be the best way to make a difference

Be careful when making net zero claims

The first is that you need to be careful with your net zero claims. If you want your business to be net zero as an entity, you need to do two things:

• Reduce your scope 1, 2 and 3 emissions  as much as you possibly can. We’d recommend using a rigorous and trusted standard such as Science Based Targets to plan how you do this. 

• For any unavoidable, residual emissions, purchase an equivalent amount of carbon credits from carbon removal projects – not emissions avoidance.

It’s worth noting that it may not be feasible to purchase only carbon removals right now – many carbon removal technologies are early-stage, meaning there are limited carbon removal credits available, and those that do exist are expensive. That’s why the Oxford Offsetting Principles for Net Zero Aligned Offsetting advocates building an offsetting portfolio which includes emissions reduction in the short-term, but shifts spend towards long-lived carbon removal by 2050. 

Remember that net zero is a government-level target

The second point to make is that the scientific targets (Paris Agreement, IPCC etc) of net zero emissions by 2050 are global targets, needing the world as a whole to reach net zero emissions.

Many of us have interpreted that to mean that individual actors must achieve net zero emissions. That’s why so many businesses have targets to reach net zero emissions for their own company’s carbon footprint. 

In reality, that completely misses the mark.

Most businesses have a small carbon footprint compared to our total global greenhouse gas emissions, so a business reaching net zero emissions themselves is unlikely to have much positive impact at all.

Instead, the point is that we all – individuals, businesses, governments, countries – need to be doing as much as we can to contribute to the global target of net zero.

That means shifting from addressing our own emissions, to looking at ways that we can be a part of the global solution to climate change. 

For businesses, we think there are two key ways to do this: 

• Committing to making financial contributions to early-stage, high-impact carbon removals projects – regardless of your own carbon footprint

• Use your network and influence to have an exponential climate impact, particularly identifying ways to embed climate impact into your product or service.

Of course, effective communication also plays a huge role in this – which is why whenever we work with businesses on their climate initiatives we always support them with safely communicating climate, including marketing templates and messaging suggestions.

If you’re keen to get started with maximising the positive impact you can have as a business, get in touch – we’re experts at creating climate positive customer experiences, and we’d love to brainstorm with you.