Carbon Neutral vs Net Zero: What is the difference?

Discussions surrounding climate change have become more important in recent years as its impacts have become more frequent and widely felt. The Government’s target to become net zero by 2050 aims to tackle climate change through the complete reduction of carbon emissions cross the UK, with people and businesses alike expected to play their part.

Organisations are the main focus of this demand, with consumers, stakeholders, and employees looking at businesses to make sustainability commitments. With this conversation becoming a priority, the use of buzzwords such as net zero and carbon neutral are mentioned more often. But what is the difference between these two terms, and how can organisations set and meet their goals for each one?

In this guide, we will be explaining what they mean and how organisations can use them to lower carbon emissions, meet sustainability targets and reduce the impact their operations have on the planet.

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What does Carbon Neutral mean?

The term carbon neutral is the act of balancing the carbon dioxide that is created and released into the atmosphere by ensuring it is absorbed or removed to achieve net-neutral emissions. This can be done through energy efficiency measures and investing in verified carbon offsetting projects, which will offset the emissions associated with an organisation’s operations.

What does Net Zero mean?

The definition of net zero differs from carbon neutral as the scope of net zero includes all greenhouse gas (GHG) emissions across scopes 1, 2 and 3. It requires the balance of the amount of GHG emissions that are produced with the amount that is removed from the atmosphere. By not adding in any more than what is taken away, we achieve net zero.

So, what is the difference between a Carbon Neutral and a Net Zero business?

These terms are often used in relation to businesses that are committed to reducing their carbon emissions outputs and becoming more sustainable. Although these terms have similar meanings, individually they describe different stages of an organisation’s carbon reduction journey.

The main difference between carbon neutral and net zero is that in becoming carbon neutral, a business does not have to commit to reducing their emissions. Rather they rely on schemes such as carbon offsetting to cancel out the emissions they produce. Typically, carbon neutrality can be seen as a short-term goal and is a good place to start an organisation’s carbon reduction journey.

Net zero is the removal of Scopes 1, 2, and 3 GHG emissions from an organisation, any emissions that cannot be reduced completely, can then be offset. Businesses can set themselves targets on when they would like to become net zero and how they plan to achieve it. As long as they align with the latest climate sciences, these can then be verified by the Science Based Target Initiative. Targets often require a comprehensive carbon reduction strategy that is tailored to the business’ capabilities, to ensure they are met successfully.  

Why become Carbon Neutral?

Many organisations are facing pressure to reduce the impact their operations have on the planet. While it is not currently within every organisation’s means to work towards net zero, by becoming carbon neutral businesses can demonstrate a recognition of their emissions, and commitment to invest in reputable schemes that support positive climate action. 

 There are a number of benefits to achieving carbon neutral status, including gaining a better understanding of your carbon emissions, fulfilling your environmental, corporate, and social responsibility, and proving your business as a leader in sustainability to customers, employees, and stakeholders.

Why become Net Zero?

As well as being a vitally important strategy in the fight against climate change, by committing to net zero, organisations can also recognise operational benefits. By reducing emissions, you will lower energy spend, be more attractive to investment, and stand out against competitors as a sustainable organisation.

You can also have your net zero plan and target verified by the Science Based Targets Initiative (SBTi), to demonstrate how they meet the goals set out in the Paris Agreement and limit global warming to 1.5C. Net zero is considered the gold standard for a business when cutting its carbon emissions.

It is also important to remember that the UK has set a target to achieve net zero by 2050, which means organisations need to work towards achieving that same goal.

What is carbon offsetting and how can it help achieve Carbon Neutrality?

Despite carbon offsetting receiving some bad press, it can play a key role in helping organisations become carbon neutral. Businesses can offset the emissions associated with their operations by investing in projects that will remove them from the atmosphere. One of the ways this can be done is by planting trees or financing carbon capture technologies.

Currently there are no regulations for carbon offsetting, however, there are a few projects that are verified and therefore can stand up against any scrutiny or claims of greenwashing. These include schemes sourced through Verified Carbon Standard (VCS), Gold Standard Voluntary Emission Reductions (VER), UK and EU Emissions Trading Standard (EU + UK ETS), and the United Nations Certified Emission Reductions (CER) programmes. By getting their offsetting independently verified, businesses can guarantee they are truly getting their emissions offset and are making a positive change.

By becoming carbon neutral through offsetting schemes, organisations are taking the first step in their carbon reduction strategy, and towards committing to achieving a longer term net zero target.

How can businesses achieve net zero?

One of the first steps in reducing your business carbon emissions is to calculate and report your Scopes 1, 2, and 3 emissions data, enabling you to understand your carbon footprint in more detail. From this, a business can choose which projects they would like to invest in to offset their carbon emissions and become carbon neutral.

For many, achieving carbon neutral status is the first step in reducing their overall business carbon emissions. Once this has been successfully achieved, businesses can focus on setting their net zero targets and getting them verified by the Science Based Targets Initiatives. This will allow organisations to monitor and celebrate their success.

Despite the bad press, achieving carbon neutral status is a great way to start a net zero journey. Becoming net zero is a complex journey and not the same for all businesses, therefore becoming carbon neutral whilst working towards net zero targets, can enable a business to utilise both ideas to enhance their carbon reduction strategy.

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