What does Net Zero really mean?
Is it the same as Carbon Neutral? And what do companies mean when they say carbon negative, positive or removals?
Net Zero (or Net Zero Carbon Emissions) is increasingly being used by companies and countries. It has emerged in response to growing demand for bold commitments on climate action, but is still lacking an agreed definition today.
This post attempts to lay out what a Net Zero commitment should be and how it has evolved from the concept of Carbon Neutrality. I start by defining Carbon Neutrality and discussing its limitations.
Please note: Carbon (CO2), as used throughout this article, is a shorthand for carbon equivalent (CO2e), which is one measure for all greenhouse gases. It is not a perfect conversion but it makes the accounting easier.
Carbon Neutrality
Simply put, Carbon Neutrality is defined as having measured, reduced and offset your carbon footprint. You could do this for a company, a product, an event, a website… the list goes on. The methodology is slightly different for each so here I focus on companies.
As a company, there are defined categories of things that you must measure such as the carbon emitted by your vehicle fleet (Scope 1 direct emissions) and your building’s electricity (Scope 2 indirect emissions). There are then a multitude of optional categories such as your supply chain, business travel or employee commuting (known as Scope 3).
Crucially, only Scope 1 and 2 emissions — sometimes referred to as operational emissions — need to be offset in order to achieve carbon neutrality. Although some companies have done this in the past, today this is not ambitious enough.
Most consultancies and certification providers don’t stop there. For instance, ClimatePartner requires companies to include a number of Scope 3 emissions categories and encourages all value chain related emissions to be included in the calculations where these are likely to be substantial (e.g. if you make a physical product).
Additionally, standards such as PAS 2060 demand that you have a carbon reduction plan but do not currently set a requirement for a minimum reduction target.
The main reason that standard bodies haven’t prescribed a specific carbon reduction target for companies is that historically it has been difficult to do this across industries and company types. Science Based Targets is one potential solution to this (explained later).
This means that theoretically a company could measure their Scope 1 & 2 emissions, set a loose and short-term reduction plan and simply offset the rest to achieve Carbon Neutrality. A good first step, but a small one at best.
Net Zero attempts to improve this on the following points:
- Setting a minimum target for carbon reduction, that includes a majority of Scope 3 emissions and within a set timeframe
- Only allowing for a specific type of offsetting called ‘carbon removals’ (explained later) to balance your emissions
Let’s look at them in more detail.
Carbon reduction targets
Setting a Net Zero commitment starts by taking true responsibility for your carbon emissions and this means including at least 66% of Scope 3 emissions.
This is a requirement for most companies who set a Science Based Target (SBT) which has become a popular solution for over 960 companies including large retailers such as Tesco’s and SMEs like Pukka Tea.
SBTs ensure that carbon reduction targets are rooted in the best available science and calculated based on what is needed for the industry, the size of the company and/or the gross profit. A SBT can vary in its ambition, but ideally should be aligned with limiting global warming to 1.5°C.
SBTs are now included as part of a few working definitions of Net Zero:
A net zero company will set and pursue an ambitious 1.5°C aligned science-based target for its full value-chain emissions. Any remaining hard-to-decarbonise emissions can be compensated using certified greenhouse gas removal. Source: Carbon Trust (2019)
SMEs who do not have the expertise, time or money to calculate a science based target may choose to align themselves with their industry’s sustainability leaders or simply go for a suitably ambitious target of >50% reduction from their chosen baseline.
What about the terms carbon positive and carbon negative?
Companies like Microsoft and Brewdog have recently committed to being carbon negative, adding to the confusion. This simply means they go beyond net zero and purchase more offsets than they emit. The devil is still in the detail… Despite the impressive headline, Brewdog has not yet made a public carbon reduction target.
Carbon positive is a non-logical synonym of carbon negative, and in my opinion should be avoided as it might lead customers to think they are ‘positively’ impacting the climate by purchasing more of the associated product or service. Other terms like Net Positive — an ambition that aims to have positive impact on planet and society — or Forest Positive further muddy the field despite their attractive marketing value. At the end of the day, it is only by digging into the detail that one can understand if they match up to the ambition of Net Zero.
This now leads us to the second key issue of carbon removals being the only offset ‘type’ allowed under a Net Zero commitment. What exactly are these and how do they differ to other types of offsetting?
Carbon removals vs. Offsetting
All carbon removals can be considered offsets if they are certified and tradable, but not all carbon offsets can be considered carbon removals.
This is because carbon offsets currently come in two main categories:
- Avoidance: projects like forest conservation avoid emissions linked to deforestation, help preserve biodiversity and provide alternative income for local communities. Other projects focus like clean cookstoves enable communities in the Global South to avoid emissions linked to burning wood for cooking that would otherwise have occurred if not for the offset project
- Removal: projects like planting trees, mangroves or sea kelp sequester or remove emissions from the atmosphere for as long as possible (or ideally indefinitely)
Removals are currently mostly limited to nature based solutions with emerging areas such as Soil Carbon Sequestration for which Gold Standard has recently released a measurement methodology.
An increasing amount of engineered solutions are also gaining ground such as Direct air capture and storage (DACS). However, as this is an emerging field, these so called carbon removals aren’t often accredited, and therefore don’t usually qualify as a certified offset by standard bodies such as VCS or Gold Standard.
Which one is better: avoidance or removal?
The short answer is that all forms of offsetting are needed. Despite the headlines spearheaded by the likes of Microsoft and Stripe, although investing in carbon removal is super important, it is not necessarily better.
For example, high quality forest conservation that provides economic opportunities for the local population and avoid deforestation can be better for biodiversity than planting trees. This is especially true if these are non-native mono-cultures that may be more susceptible to disease and destruction.
Additionally, we need to think about the climate crisis through a human rights lens, ensuring that we all benefit equally from the transition to a low carbon economy. Projects which provide employment and clean energy to underserved communities such as this hydropower project in Virunga Park in Congo must be an important part of the solution.
But isn’t offsetting greenwashing?
Some activists and eco-warriors claim to be deceived by offsetting claims made by companies:
“Offsetting is a licence to pollute the environment.”
“It’s equivalent to cheating on your spouse and paying someone else not to cheat on theirs.”
“They should simply reduce their carbon to zero instead of paying for someone else to solve their problems!”
The reality is not so simple. Reducing carbon emissions to zero, and doing so fast enough, is near impossible for most companies. Being pedantic, simply having employees makes this impossible as they exhale (and therefore emit) CO2 and thus making the goal of emitting zero carbon obsolete.
Why is offsetting needed and useful?
- Most companies who care enough to invest money in offsetting understand their carbon footprint better and tend to take action either way
- Reducing your carbon footprint is a long and difficult process and the climate crisis isn’t waiting for us to figure things out. Offsetting is sometimes the only aggressive, responsible and useful action companies can take, right now
- Our climate has no borders and doesn’t care for appearances. If every person, company and country were to offset their carbon via removals, according to the science, this should in theory help to stabilise our climate
- It is only a matter of time before any company making offsetting claims will get accused of greenwashing if it doesn’t have an ambitious carbon reduction plan to go with it
- Even if a company were to reduce their carbon footprint by 80%, the cost to reduce the remaining 20% to zero may simply not be economically viable. This same money might go a lot further by investing it on proven offsetting projects
Offsetting is therefore an important part of the solution and should not be disregarded. Without it, we currently cannot achieve Net Zero.
In conclusion, Net Zero is a welcomed addition to the sustainability lexicon. Language is important and Net Zero certainly has the allure of ambition. But commitments are only as strong as what they stand for. Net Zero needs to be accompanied by strong reduction targets, preferably science based, as well as high quality offsetting (carbon removal) projects.
Most of all, those truly wanting to set the bar for climate leadership should ensure they are fully transparent about their efforts, so that we can all learn together how to transition to a low carbon, sustainable economy.
N.B. If you’ve made it this far and want to take action, ClimatePartner has recently opened up a new office in London to help companies with Scope 1–3 carbon footprint measurement, Science Based Targets, product carbon footprint measurement, and quality offsetting projects (including carbon removal!). Do get in touch :)
