Climate change terminology can be confusing to say the least. Thanks to overlapping and synonymy there are many terms that describe similar concepts related to climate change accompanied by plenty of technical jargon a, changing definitions and political framing that can make certain concepts difficult for non-experts to understand. One area of confusion in our view is centred around the difference between carbon neutral and net zero. In this article we will explain the difference between the two.
What is carbon neutral?
Carbon neutral is a status that an organization achieves when it offsets its greenhouse gas emissions against the total CO2 emitted from its operations. Generally, the goal of any organization is to reduce its emissions as much as possible in order to achieve a particular carbon balance with the rest of the world.
However, for economic, logistical and practical reasons, offsetting CO2 emissions is generally the most efficient and cost-effective way of achieving such a carbon balance. If an organization achieves this carbon neutral status, it has offset its emissions against the total CO2 emitted from its operations. Generally, a carbon neutral organization has offset the equivalent amount of CO2 emitted from operations through projects that remove greenhouse gas from the atmosphere, which includes planting trees, restoring degraded land, capturing CO2 and sequestering it in soils, and other similar practices.
What is net zero?
Net zero, also known as “zero waste” or “zero landfill”, is achieved when an organization completely eliminates greenhouse gas emissions from its operations by ensuring that there will be no more CO2 released into the atmosphere from its operations in any foreseeable future. It doesn’t necessarily mean eliminating all emissions from a business’s operations; rather than minimizing them as much as possible in order to achieve zero emissions within 100 years of operation.
Net zero emissions from a facility generally indicate that a business is doing everything possible to eliminate CO2 emissions from its operations. Since it isn’t feasible to eliminate CO2 emissions from a business’s operations entirely, a net zero emissions policy indicates that the business is taking steps to reduce its emissions as much as possible by using energy, such as using renewable energy sources, by developing efficient and environmentally friendly technologies, and so on.
Which is more importnt – carbon neutral or net zero?
Net zero analysis is key to understanding climate change impact
The impacts of climate change are not commonly understood by the public. Therefore and frustratingly, many organizations continue to operate as if the threat posed by climate change doesn’t exist yet. But, this is practically impossible without understanding the scope and scale of the problem. This is why it is critical for organizations to understand the impact of their emissions on climate change and align their decisions with this impact.
Net zero analysis is one of the most important steps that any organization can take in this direction. It helps organizations understand their carbon footprint and calculate the impact of their greenhouse gas emissions on climate change. It is also used to assess the potential impacts of potential climate change mitigation measures. Once an organization has completed a net zero analysis, it can effectively engage its stakeholders and work toward reducing emissions.
Benefits of carbon neutrality and net zero
Achieving carbon neutrality and net zero can be seen as both a cost and an opportunity for companies, depending on how they approach it. In the short term, there may be costs associated with reducing emissions and offsetting remaining emissions through activities like investing in renewable energy or carbon capture technology. These costs can include the capital investments required to implement new technology, operational costs associated with running the new systems, and the cost of purchasing offsets.
However, in the long term, companies that take a proactive approach to reducing emissions and achieving carbon neutrality can benefit from a number of advantages, including:
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Improved reputation and brand image: Companies that demonstrate a commitment to sustainability and the environment can enhance their reputation and brand image, which can lead to increased customer loyalty and improved business performance.
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Cost savings: Implementing energy-efficient practices and reducing emissions can result in cost savings, including reduced energy costs, lower operating costs, and improved supply chain efficiency.
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Compliance with regulations: Companies that are proactive in reducing emissions may be better positioned to comply with future regulations on greenhouse gas emissions.
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Access to new markets: Companies that are leaders in sustainability may have a competitive advantage in accessing new markets and attracting investment.
Summing up: Key differences between carbon neutrality and net zero
To sum up, here we oultine the key differences between carbon neutrality and net zero:
– Carbon neutrality is used to measure how well an organization offsets its CO2 emissions. Net zero is used to measure how well an organization eliminates CO2 emissions from its operations.
– Carbon neutrality is achieved when an organization offsets the equivalent amount of CO2 emissions from operations through projects that remove greenhouse gases from the atmosphere. Net zero emissions from a facility leads to other benefits as well, such as significant reductions in energy usage and decreases in system costs.
– Carbon neutrality is relevant for an organization’s lifetime. Net zero emissions from a facility is relevant for the life of the facility.
– Carbon neutrality can be achieved with investments in renewable energy sources, such as solar power and wind turbines. Net zero emissions from a facility is accomplished through operational and technological improvements.
Examples of companies pursuing carbon neutrality and/or net zero
There are many companies around the world that are pursuing carbon neutrality and net zero as part of their sustainability goals. Here are some examples:
Companies pursuing carbon neutrality:
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Google: The tech giant has set a goal to be carbon neutral in its operations, which includes its data centers and office buildings, by 2020. This was achieved by reducing emissions, purchasing renewable energy, and investing in carbon offset projects. See Google’s ESG score.
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Nike: The sports apparel company has set a goal to be carbon neutral across its entire value chain, which includes its suppliers, by 2025. This is being achieved through a combination of reducing emissions, increasing energy efficiency, and investing in renewable energy. See Nike’s ESG score.
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Patagonia: The outdoor clothing and gear company has been carbon neutral in its operations since 2011 and continues to offset any emissions that it cannot reduce.
Companies pursuing net zero:
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Microsoft: In 2012, Microsoft became carbon net zero. In 2020, it decided that this wasn’t good enough and announced it would be carbon negative by 2030. See Microsoft’s ESG score.
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Unilever: The consumer goods company has set a goal to be net zero in its carbon emissions by 2039, which includes reducing emissions across its entire value chain and investing in renewable energy and carbon offset projects. See Unilever’s ESG score.
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Amazon: The e-commerce giant has announced a goal to be net zero in its carbon emissions by 2040, which includes reducing emissions from its operations, supply chain, and delivery network. See Amazon’s ESG score.
These are just a few examples of companies that are pursuing carbon neutrality and net zero. However, greenwashing aside, the list of companies that are committed to reducing their carbon footprint continues to grow as more and more companies recognize the importance of addressing climate change and taking action to reduce their emissions.
Conclusion
Carbon neutral businesses are a step in the right direction to reducing CO2 emissions. Net zero businesses, on the other hand, are doing everything possible to eliminate CO2 emissions from their operations. Organizations can achieve both carbon neutrality and net zero emissions through an investment in renewable energy sources, including solar power and wind turbines, and through operational and technological improvements, like energy efficient lights, motors, and equipment. Carbon neutral businesses are a step in the right direction to reducing CO2 emissions.
Net zero businesses, on the other hand, are doing everything possible to eliminate CO2 emissions from their operations. Organizations can achieve both carbon neutrality and net zero emissions through an investment in renewable energy sources, including solar power and wind turbines, and through operational and technological improvements, like energy efficient lights, motors, and equipment.