Net Zero vs. Carbon Neutral: the significance of sustainability claims

Wednesday 4 October 2023

Net Zero vs. Carbon Neutral: the significance of sustainability claims 

As the world grapples with the urgent need to combat climate change, terms like "net zero" and "carbon neutral" have become buzzwords in corporate boardrooms, political discussions, and environmental initiatives. While these terms may seem interchangeable, they have distinct meanings and implications that are crucial for understanding the efforts to mitigate climate change.

Defining Net Zero & Carbon Neutral

Net Zero Emissions: Net zero emissions refer to the balance between the greenhouse gases (GHGs) emitted into the atmosphere and those removed from it. Achieving net zero means that a company, organization, or even a nation is actively working to reduce its emissions and offset any remaining emissions through actions like reforestation, carbon capture technologies, or investments in renewable energy.

Carbon Neutral: Carbon neutrality, on the other hand, signifies that an entity has balanced its GHG emissions by either reducing emissions to zero or by investing in carbon offset projects to compensate for its emissions. Unlike net zero, carbon neutrality doesn't necessarily require active emissions reduction efforts; it can rely heavily on offsetting.

Scope of Carbon Neutral and Net Zero

Net Zero: Initiatives typically include emissions from all three scopes as defined by the Greenhouse Gas Protocol. This encompasses Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased energy), and Scope 3 (indirect emissions from the entire value chain). In essence, net zero aims to address emissions comprehensively.

Carbon Neutral: Carbon neutrality, conversely, mainly focuses on achieving a balance in carbon dioxide (CO2) emissions. While some contexts consider other greenhouse gases as well (using CO2 equivalents or CO2e), the primary emphasis remains on CO2. The specific scope of emissions for carbon neutrality can vary, with some entities focusing solely on their direct operations while others consider a broader range of emissions across product life cycles.

Making Credible Claims

To make credible net zero or carbon neutral claims, entities must follow a structured approach. This begins with setting clear and ambitious targets that specify emissions scope and timelines. Transparency is essential throughout this process. For a net zero claim, active emissions reduction efforts are crucial, including transitioning to renewable energy sources and adopting sustainable practices. In both strategies, carbon offsetting can play a role, but it must be complemented by genuine emissions reductions. These offset projects should be well-vetted, high-quality, and verifiable. Engaging third-party organizations to verify emission reductions and offset projects adds credibility to claims, ensuring accuracy and legitimacy.

Greenwashing Risks

However, there are risks associated with making environmental claims. Greenwashing, or the deceptive practice of exaggerating or falsely claiming environmental responsibility, is a concern. Some entities may make minimal efforts towards emissions reduction while promoting themselves as net zero or carbon neutral. Using vague terminology without clear definitions can create confusion, with entities claiming to be "green" or "eco-friendly" without providing evidence of their actions. Lack of transparency in reporting emissions and reduction strategies can also lead to skepticism. Unverified claims further undermine trust in environmental commitments, and overreliance on carbon offsets without real emissions reductions diminishes the effectiveness of climate action.


In the fight against climate change, the distinction between net zero and carbon neutral is crucial. Making credible claims in either category requires clear targets, genuine emissions reductions, and transparent reporting. To avoid greenwashing risks, entities should prioritize authenticity, transparency, and third-party verification. By doing so, we can foster trust and collectively work towards a sustainable, low-carbon future.

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