cart.general.title

What is the difference between carbon neutral and net zero?

With the new wave of climate management innovation, it is important to identify and distinguish between carbon neutrality and net-zero greenhouse gas emissions (GHG).

Carbon neutrality focuses on neutralizing the amount of carbon emissions, while the Net Zero initiative focuses on neutralizing all greenhouse gases.

According to the United Nations, businesses, organizations, and entire nations are racing to develop and implement net-zero emission initiatives beyond carbon neutrality.

Although these terms are often used interchangeably, understanding their differences is a crucial step in making informed business decisions that reflect accurate environmental, social, and governance (ESG) performance indicators.

What's the difference between carbon neutrality and net zero?

What's the Difference Between Carbon Neutrality and Net Zero?

The main difference between carbon neutrality and sustainable net-zero efforts is that net-zero can include solutions for existing greenhouse gases and propose strategies to reduce greenhouse gas emissions from the start.

Net-zero emissions goals focus on developing internal solutions, such as reducing emissions, and external solutions, such as carbon removal projects. In contrast, carbon neutrality efforts only focus on developing sustainable carbon offset programs to neutralize current emission levels.

What's the difference between carbon neutrality and net zero?

Carbon Offset and Their Relation to These Definitions

The goal of carbon offsetting is to compensate for emissions by removing carbon from the atmosphere. If a carbon offset program is successful, it will remove as much carbon from the atmosphere as it is created.

Entities committed to achieving carbon neutrality can implement carbon offset programs by using artificial or natural carbon reservoirs, carbon capture techniques, reforestation, and following the general recommendations of the Science-Based Targets Initiative (SBTi).

SBTi recommends that entities limit their dependence on carbon removal and integrate long-term carbon reduction efforts into their climate action strategies.

What Does Carbon Neutrality Mean?

What Does Carbon Neutrality Mean?

According to SBTi, carbon neutrality is achieved when an entity's carbon emissions are balanced by their removal.

Although achieving carbon neutrality does not necessarily lead to a reduction in carbon emissions, it demonstrates the potential of carbon offsetting as a temporary tool while climate action technologies continue to develop.

Achieving carbon neutrality does not mean your operations will not emit carbon, but it means you choose to lead and take steps with lighter carbon emissions.

Examples of Carbon Neutrality

Among the hundreds of companies committed to achieving carbon neutrality by 2050, some prominent players include:

  • Apple by 2030.

  • BP by 2050.

  • Delta Air Lines by 2030.

  • FedEx by 2040.

  • Ford by 2050.

Each of these entities has agreed to regularly report on carbon accounting and implement carbon offset programs to compensate for their current emissions. However, ESG initiatives like carbon neutrality are not without their flaws. Before implementing carbon neutrality commitments, you should consider their pros and cons.

Pros and Cons of Carbon Neutrality Commitments

When a well-known brand takes a stance against pollution, it encourages organizations to follow suit and transforms sustainability into the new normal. However, carbon neutrality commitments can also divert attention from understanding the root causes of the issue.

Pros and Cons of Carbon Neutrality Commitments

Here are some of the most common considerations and concerns regarding carbon neutrality commitments today:

  • Commitments create favorable conditions for frequent carbon accounting and raise awareness and accountability for climate actions at the corporate level.

  • Taking steps towards emission accountability is a starting point for companies to implement further sustainable practices and policies.

  • For industries unable to achieve full carbon reduction by 2050, carbon offsetting is an additional option.

Commitments create favorable conditions for frequent carbon accounting and raise awareness and accountability for climate actions at the corporate level.

Taking steps towards emission accountability is a starting point for companies to implement further sustainable practices and policies.

For industries unable to achieve full carbon reduction by 2050, carbon offsetting is an additional option.

The following carbon neutrality issues stem primarily from a lack of physical commitment to reducing emissions in their current business models, choosing to maintain carbon neutrality instead.

What is Net Zero?

What is Net Zero?

The Science-Based Targets initiative (SBTi) defines net zero as the goal to eliminate all greenhouse gas emissions equivalent to physical production. Organizations with science-based targets (SBT) aiming for a net zero emissions target first need to reduce 90-95% of emissions.

While carbon neutrality focuses on carbon emissions, net-zero efforts take climate action a step further by aiming to neutralize all types of greenhouse gases, including carbon dioxide, methane, nitrous oxide, nitrous trifluoride, and fluorinated gases.

The purpose of achieving net zero emissions is to efficiently remove carbon from the atmosphere and mitigate global warming. The Paris Agreement recommends that all nations reach net zero emissions by 2050 to avoid irreversible damage.

Examples of Net Zero

The Science-Based Targets initiative collaborates with over 3,000 companies actively implementing emission reduction strategies. Here are some notable participants:

  • Etsy became the first e-commerce platform to neutralize its shipping emissions.

  • JetBlue achieved carbon neutrality on domestic flights.

  • Logitech disclosed the carbon impact of its product packaging.

  • Microsoft achieved carbon neutrality and plans to be carbon negative by 2030.

  • Uber committed to using zero-emission vehicles by 2040.

All parties signing SBTi commitments agree to regularly report on carbon and must implement quantifiable emissions reduction strategies. However, as more entities join the net-zero movement, the legitimacy of this ambitious goal is being questioned.

The net zero standard developed by SBTi encourages entities to go beyond their value chains and implement emissions reduction strategies in Scope 1, 2, and 3 emissions.

Advantages and Disadvantages of Net Zero Commitments

The level of change required to become a net-zero emitter has led many companies to pursue carbon neutrality targets instead of net zero targets.

Advantages and Disadvantages of Net Zero Commitments

While these changes can be challenging, research shows that many companies are willing to undertake these commitments. Here are the main benefits that a net-zero climate action plan can bring:

  • Net-zero strategies address all greenhouse gas emissions and can have a greater climate impact than carbon neutrality.

  • Net Zero commitments enhance a company's competitive advantage by providing stakeholders and customers with transparency about their sustainability efforts, influencing consumer purchasing and investment decisions.

  • Efforts to neutralize carbon can be incorporated into net-zero emissions strategies, such as integrating renewable energy sources into your business model or temporarily supplementing carbon offset programs.

Net-zero strategies address all greenhouse gas emissions and can have a greater climate impact than carbon neutrality.

Net Zero commitments enhance a company's competitive advantage by providing stakeholders and customers with transparency about their sustainability efforts, influencing consumer purchasing and investment decisions.

Efforts to neutralize carbon can be incorporated into net-zero emissions strategies, such as integrating renewable energy sources into your business model or temporarily supplementing carbon offset programs.

Now, let's consider the disadvantages of net zero to understand why some entities may hesitate to commit to achieving net zero emissions:

  • Net-zero strategies can be challenging to achieve because they require entities to reshape their value chains. This transformation can be a challenge for companies newly engaging in climate action plans or with a comprehensive portfolio of strong businesses.

  • This strategy is still struggling to gain global acceptance, with critics arguing that achieving net zero emissions by 2050 is not realistic.

  • Some entities declare net zero emissions targets without significantly reducing their greenhouse gas emissions, effectively greenwashing their organization's sustainability efforts.

Net-zero strategies can be challenging to achieve because they require entities to reshape their value chains. This transformation can be a challenge for companies newly engaging in climate action plans or with a comprehensive portfolio of strong businesses.

This strategy is still struggling to gain global acceptance, with critics arguing that achieving net zero emissions by 2050 is not realistic.

Some entities declare net zero emissions targets without significantly reducing their greenhouse gas emissions, effectively greenwashing their organization's sustainability efforts.

Monitoring net zero emissions indicates that over 90 countries have officially recognized and shared net zero targets. However, nearly the same number of countries have yet to take steps towards achieving net zero emissions or expressing concern about climate actions.

Positive Climate Means?

Adopting a positive climate approach means going beyond carbon neutrality to have an overall positive impact on the environment by removing additional carbon emissions beyond the physical value chain.

The concept of a positive climate approach has gained support from companies worldwide. Max Burger's climate-positive meat sandwiches show that delicious food can be good for the environment. The North Face created a climate-positive hat made from farm-harvested wool that removes more carbon than it produces.

What is Carbon-Free?

A carbon-free entity is one that uses carbon-free energy sources. For example, solar and wind energy would be considered carbon-free energy reserves.

These carbon-free energy sources have become major players in the fight against global warming and the pursuit of climate positivity.

While not every company worldwide can achieve carbon-free emissions, consumers are increasingly able to choose a carbon-free lifestyle.

How to Set Carbon Neutrality or Net Zero Targets

The United Nations has declared that stabilizing the planet's temperature requires more ambitious climate action. Setting carbon neutrality or net zero emission targets is a feasible way to combat climate change at both individual and collective levels.

The first step is to calculate your organization's current emissions. From there, you can develop an effective action plan to reduce carbon emissions and potentially reduce other greenhouse gas emissions during this process.

When establishing climate action goals, try to reflect the Paris Agreement by making them measurable, sustainable, and adaptable. Ideally, your goals should be flexible to incorporate new technologies that can facilitate climate action plans.

How to Set Carbon Neutrality or Net Zero Targets

Be as transparent as possible about your emissions so that you can develop practical solutions to reduce emissions if feasible.

Engaging in climate action plans typically involves examining a large amount of emissions data and sharing reports with stakeholders, governments, and the entire organization.