Sustainable Development

Carbon neutral and net zero – what do they mean?

carbon neutral net zero

Both carbon neutral and net zero refer to different actions that are essential to combat climate change. Image: Unsplash/ Appolinary Kalashnikova

Samuel Kingsley
Writer, Neste
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Net Zero Carbon Cities

  • Both carbon neutral and net zero refer to different actions that are essential to combat climate change.
  • Carbon neutral can cover a defined part of business operations and typically accounts for CO2 emissions, but not other greenhouse gases.
  • Net zero on the other hand means that a company reduces all greenhouse gas emissions across its whole supply chain.

Whether we’re buying a coffee, booking a vacation or making investments, the jargon around sustainability can be confusing and overwhelming, making it hard to know if we’re making the right choices.

In this article we take a look at some of these terms and dig deeper to investigate whether they remain meaningful tools in the fight against climate change - and consider whether new words are needed to help us in our efforts to save the planet.

Carbon Neutral vs Net Zero – what’s the difference?

In a carbon neutral organization there is a commitment to evaluate the CO2 emissions produced. This is coupled with finding ways to reduce those emissions and with compensating for these by reducing emissions elsewhere, or by removing an equal amount of CO2 from the atmosphere.

This balancing practice is known as carbon offsetting and could involve planting new trees or investing in renewable energy, or with for example bioenergy carbon capture and storage (BECCS).

The term carbon neutral “has been in use for quite some time already,” says Senja Kuokkanen, Sustainability Manager at Neste, a global leader in renewable and circular solutions. “Carbon neutral can cover a defined part of business operations, and typically accounts for CO2 emissions,” and not other greenhouse gases.

“Net Zero is considered the gold standard for corporate climate action”.

Net Zero on the other hand means that a company reduces its absolute emissions across its whole supply chain, in order to support the target to limit global temperature increases to 1.5 degrees Celsius, as agreed in the 2015 Paris climate summit.

The Science Based Targets initiative (SBTi), a partnership between CDP, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature, has set out the world’s first Net Zero standard, providing companies with a framework and tools to effectively implement the Net Zero target.

While the newer ‘Net Zero’ term is considered “the gold standard for corporate climate action,” Kuokkanen adds that it isn’t about one term being better than the other; both refer to different actions that are essential parts of the whole as we combat climate change.

Indeed both terms have an important role to play as part of a hierarchy of emissions mitigation work carried out to meet climate targets; this starts off at one end of the scale with avoiding new greenhouse gas emissions altogether, to compensating for any remaining with actions outside your own value chain at the other end of the scale.

Mind your climate change language!

With everyone now talking about climate crises, carbon neutrality and Net Zero targets, should we worry that the green momentum could be dented by buzz words that have little meaning for the wider public?

Climate terms are certainly prone to misuse, says James Cameron, an independent climate advocate who advises organizations including Neste and the climate investment consultancy Pollination Global.

With terms like carbon neutral and Net Zero, “we’ve had to construct ideas that motivate action,” says Cameron, who helped negotiate international climate accords including the 1997 Kyoto protocol.

“With terms like carbon neutral and Net Zero we’ve had to construct ideas that motivate action.”

“They are themselves simplifications and have flaws and need to be interpreted, but they are better than not having anything,” he insists.

Even if some companies do overstate their green credentials, the very act of talking about the issue pushes the climate emergency further up the agenda, Cameron believes.

What’s more, the idea of Net Zero “is simple to communicate, when a lot of the other targets and methodologies are quite complicated.”

Kuokkanen agrees that “the amount of enthusiasm around climate topics” is cause for optimism, and “is steering us all in the right direction.”

Do we need new ways to talk green?

Language has an important role in motivating and inspiring urgent action and there is huge value in considering this galvanizing effect when we consider the words that we use.

Cameron says: “There has to be some vision of life getting better that allows people to feel excited by the prospect of doing whatever it takes to get to that objective.”

He advocates using words such as ‘regeneration’, which is “a positive concept that contains both risk and excitement of opportunity.”

Similarly, talking about ‘harnessing the exponential’ “gives us a sense of hope,” that we could accelerate innovation “and catch up with a problem that otherwise is escaping us.”

Cameron is keen to try to tackle the climate emergency “via other priorities for societies and economies, without needing to use climate change as the motivation.”

“We should shift the discussion towards what a net-zero world would look like.”

Kuokkanen believes that shifting the discussion towards what a net-zero world would look like is vital to help us “to really understand the scale of this challenge,” and therefore move from ambition to real, measurable action to mitigate emissions.

That means for example envisioning “what kind of energy we will use, how will we live and travel? What will our livelihoods look like? Will we all have an annual greenhouse gas emission budget?”

Once we adjust our perspective to a Net Zero world, “it could lead to some really exciting discussions,” Kuokkanen says, “and that helps us identify and take the next meaningful steps.”


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