Carbon-neutral and net-zero are terms we hear thrown around a lot these days. Unfortunately, they create a lot of confusion because they have similar but slightly different meanings, and are used for different purposes.
‘Carbon-neutral’ means that you’ve taken steps to offset the carbon emissions of your business, such as making changes in operations like switching from fossil fuels to renewable energy sources and offsetting. Meanwhile, ‘net-zero’ refers to removing equal amounts of greenhouse gases from the atmosphere as are emitted.
Perfectly sustainable, perfectly difficult – and not always applicable, as we shall see!
Let’s start with the basics.
What does carbon-neutral mean?
If a company is ‘carbon-neutral’, it generally means that it has reduced the carbon footprint and environmental impact of its business. This means first directly lowering emissions by improving manufacturing processes or switching to renewable energy such as wind, solar, or hydro; and secondly, buying carbon offsets – also known as carbon credits – for emissions that can’t be avoided, like transport.
Each credit represents one tonne of emissions reductions, and these reductions can come from avoiding emissions (example: preventing deforestation) or by removing already emitted carbon (example: reforestation).
In other words, carbon neutrality means that companies have reduced their GHG emissions as much as possible, and countered their unavoidable emissions by buying carbon offsets, which are created by emissions reductions elsewhere.
Why is carbon-neutrality important and what does it mean for our planet?
Companies, processes, and products become carbon neutral when their emissions are entirely negated. As mentioned above, this requires first reducing emissions as much as possible and then compensating for any unavoidable emissions, by calculating a carbon footprint and offsetting it through a carbon project.
Why is this important? Well, scientists and climate experts agree that if we are to avoid a climate catastrophe, we must act quickly to slow and repair the damage being done to our atmosphere. Going carbon neutral helps negate part of the unavoidable negative impact of doing business.
Purchasing carbon offsets and going carbon neutral is something that can be achieved here and now; it doesn’t need long-term planning. Although converting to new zero-emissions hardware or technology will be critical in the future, many carbon-negative technologies don’t always exist yet, and transformations always take time.
During this transition period, offsets help accelerate the global effort to reduce emissions, which gives us a chance to reduce the impacts of climate change – and avoid the worst. This is especially important, as the consequences of climate change for people and natural ecosystems are already visible in many parts of the world.
Carbon projects can also create exceptional co-benefits. Take Stand For Trees’ Kariba Wildlife Corridor project in Zimbabwe as an example:
Due to political and economic turbulence, Zimbabwean communities have been forced to delve into their forests for subsistence farming and fuelwood, leading to the loss of more than a third of the country’s forest area. The Kariba carbon offsetting project is designed to protect the trees that remain while also giving local people the jobs and skills they need to thrive, like training in sustainable farming, beekeeping, and ecotourism. It also boosts their well-being by providing healthcare and infrastructure, including new roads. Furthermore, Kariba connects four national parks and eight safari reserves for a giant biodiversity corridor protecting a majestic forest.
Our projects don’t just work for the climate; they also work for communities, ecosystems, and wildlife. Check out some photos below – or keep reading for a free guide and to find out more about carbon neutral and net zero.
If you are a small business, you can also learn more about the process by downloading our Carbon Offset Credits Guide. It can assist you in determining your initial carbon footprint measurement as well as obtaining your carbon credit certificate. Discover more about how you can develop a strategy for meeting climate goals and mitigating climate impacts.
Where did the term ‘carbon-neutral’ come from?
Even if we are not experts in climate science, we are probably aware of the gravity of the impending climate crisis. And most of us are probably also familiar with the term “carbon neutral”. But have you ever wondered where it came from?
The expression first appears in the early nineties referring to plants, which can be described as carbon neutral if the amount of CO2 they absorb while alive is equal to the amount of CO2 they give out when burned.
Paul Hawken’s influential book “The Ecology of Commerce” highlights the relationship between business and the environment and is seen as a foundational work for scholars interested in the greening of business, sustainable enterprise, and environmental policy.
The Climate Neutral Business Network is incorporated & backed by the U.S. EPA, and companies start committing to becoming carbon neutral.
Shaklee becomes the first certified carbon neutral company in the world.
Carbon Neutral is Oxford Dictionary’s word of the year.
Who uses carbon-neutral these days?
As of October 2020, 163 Fortune Global 500 companies had publicly committed to meeting at least one of these climate targets, accounting for 32.6 percent of the total group. ‘Carbon-neutrality’ is the most common goal, with 91 companies on board.
The term is also commonly used by small and medium companies, like the ones we support with the Stand For Trees Business Programs. Our programs help companies of any size to create ambitious climate action targets and to take charge of their emissions. We have guided fashion, travel, and food brands – like SOCQUE, a fashion shoe company – in achieving their climate goals through our offset projects. And with our Climate Guardian and Hero tiers, you can claim carbon-neutral status – and beyond.
Companies, businesses and organizations are not the only entities mobilizing; cities, countries, and governments are too. For example, in 2019-2020, the city of Adelaide was declared carbon neutral (one of the world’s first cities to achieve this status), and many others are following suit.
What is net-zero carbon or net-zero emissions?
Net-zero is similar to – but slightly different from – carbon neutrality. It requires balancing man-made greenhouse gas emissions with removals. That is to say, everything emitted must be compensated by an equivalent removal.
A ‘removal’ occurs when carbon is extracted from the atmosphere and stored. For example, we can rely on natural processes (such as planting vast amounts of trees or restoring grasslands) to absorb CO2, or we can use a new carbon removal technology like direct air capture, which captures the carbon and storing it in a different form. Do enough of this, and we might even go carbon negative – some day!
Why is net-zero important?
Removing all man-made emissions from the atmosphere would bring the Earth’s net carbon balance to zero. This sounds great! But there are two important details to note here.
One. Net-zero, and the use of carbon removals, are not a replacement for avoiding emissions in the first place – like by stopping deforestation or fossil fuel use. The more ’emitted emissions’ that we have to balance, the more pressure there is on removals – and the less likely they are to succeed.
Right now, the most realistic carbon removal solution is tree planting – which isn’t always the best option. Other negative emissions technologies, like any advanced form of technology, are still prohibitively expensive. And again, the more emissions in the atmosphere, the more heavy lifting all these technologies will need to do.
Two. Getting to net-zero carbon emissions isn’t the same as getting rid of all emissions. Net-zero focuses specifically on man-made emissions that cannot be avoided or locked up. Which brings us to the next point…
Where did the term ‘net-zero’ come from?
Myles Allen, Dave Frame, and other scientists publish a paper highlighting that cumulative emissions of CO2 largely determine the eventual extent of global warming.
The IPCC Fifth Assessment Report states that limiting global temperature change means limiting the cumulative stock of CO2 emissions. Essentially, to stop global warming, net additions of CO2 into the atmosphere have to reach zero.
The Paris Agreement requires parties to put their best efforts forward to achieve net-zero emissions by the second half of the century.
Sweden becomes the first nation to initiate a mid-century net-zero target (2045) in law.
The IPCC Special Report on 1.5°C concludes that limiting temperature rise to 1.5°C and preventing the worst effects of climate change implies reaching net-zero emissions by mid-century and deep reductions in non-CO2 emissions.
The UN-led Race to Zero campaign is launched to drive net zero commitments.
Net-zero pledges cover over two-thirds (68%) of the global economy.
Who uses net-zero?
The Science-Based Targets Initiative (SBTI) is one of the major proponents of net-zero and has played a key role in its adoption into many corporate climate change action plans. Some major companies with notable net-zero commitments for 2021 include Coca-Cola, Sasol, China Petroleum & Chemical Corporation (Sinopec), General Motors (GM), Engie, Nippon Steel, and Boral.
Carbon neutral vs. net-zero
Both these concepts actually go together. Here’s how:
A company should strive to make as many emissions reductions as it can.
Then, in our opinion, funding of projects that prevent emissions is the best option. (Like Stand For Trees’ forest conservation projects.)
Using only removals for your climate goals means that your company might reach net-zero – but the planet would not.
After that, removals can begin to play a part. (After all, you don’t need to remove anything that isn’t emitted!) This way, a company can go carbon-neutral – negating its own emissions – while ensuring that it also contributes to the global net-zero goal of finding a balance between carbon emissions and removals.
If a company uses only removals, like planting of trees, to counter its residual emissions, but other emissions continue elsewhere, the planet is not reaching net-zero.
So, although the company might be carbon-neutral, the planet would not be – an important distinction.
What is a carbon neutral company?
When businesses, processes, and products reduce, then quantify their remaining carbon emissions and compensate for them through carbon offsetting programs, they become carbon neutral. Carbon offsets, in addition to carbon avoidance and reduction, are critical components of sustainable climate action.
What is a net-zero company?
A net-zero company is one that achieves a balance between the emissions produced by its operations and the emissions it eliminates from the atmosphere. Within the company's frame of reference, that can often mean the same thing. But as we explained above, for the planet, there is a key difference.
To sum up
Whether you’re purchasing coffee, booking a vacation, or making investments, the jargon around sustainability can be confusing and overwhelming – it can be difficult to know if you’re making the right decisions.
After reading this article, we hope you better understand the terms ‘carbon neutral’ and ‘net-zero’ and the nuanced types of actions, targets, and goals that are involved in paying attention to climate change. The climate emergency is worsening, but there are several potential opportunities to do more to mitigate the impact of climate change.
The path toward net-zero starts with carbon neutrality. Companies can become carbon neutral right now by reducing their emissions as much as possible and then compensating for any unavoidable emissions through carbon offsetting projects. And that’s what we offer here at Stand For Trees. Through our business programs, you can support high-quality projects that prevent the destruction of old-growth forests and the release of carbon dioxide stored within them. Businesses deserve to have an active role in chartering a climate action plan to fit their business model and values. Becoming a climate leader with us is an exciting and rewarding ride and comes with benefits for communities, wildlife, and ecosystems.
No matter where you are on your journey, Stand For Trees can help you take the next step – and lessen the burden of climate change for the entire world.
Discover our business programs, and become a climate leader.