The three most important terms when setting climate targets are often used interchangeably. Wrongly so, thinks Kenneth Van den Bergh, co-founder of carbon accounting specialist Carbon + Alt + Delete. Because net zero, climate neutrality, and carbon neutrality are separate concepts, each with different implications. And it is high time to list them.
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“Let’s start with the most current term,” says Van den Bergh, “which has the biggest impact if you want to claim it as a company or organization: net zero. If you want to be net zero, first of all you have to include all seven greenhouse gases from the Kyoto Protocol in your emissions. So not just CO2 emissions, but also those of methane and nitrous oxide, for example.”
“You have to address those emissions in the three scopes. That is the second condition. In other words: direct emissions in your own organization (Scope 1), indirect emissions from the purchase of electricity and heat (Scope 2) and emissions from the partners along your entire value chain (Scope 3). You ‘tackle’ emissions by reducing them as much as possible.”
Emissions that you cannot avoid, you have to offset. “This brings us to the third and final condition when speaking of net zero. Only offsetting projects that remove greenhouse gases already present in the atmosphere count. Such as planting a forest not too far from where your organization operates. Or capturing carbon upon your own company premises.”
So net zero does not mean that you can no longer emit anything at all. After all, the ‘net’ in net zero means ‘after deduction’. You still cause emissions, but you compensate them according to set rules, so that after deduction of that compensation, net no emissions remain.
The second concept, climate neutrality, does not go so far. As Van den Bergh explains: “To be climate neutral, you also have to include all seven greenhouse gases. But only in your first and second scope, and only to a limited extent in your third scope. That’s how the term is interpreted today.”
“Another important difference is in offsetting emissions you cannot avoid. Besides removing greenhouse gases already present in the atmosphere, you can also compensate by preventing others from emitting them, anywhere in the world. For instance, you can invest in a wind farm in India, thus reducing the number of coal-fired power plants built there. You see, when moving from net zero to climate neutral, the compensated emissions become more virtual.”
“If you want to be CO2 or carbon neutral, you only need to include CO2emissions in your emissions. You can leave out the other greenhouse gases. Otherwise, the same conditions apply with this concept as for climate neutrality.”
Why is it that there is so much ambiguity about the terms? “It is true that net zero, climate neutrality and carbon neutrality are lumped together.” says Van den Bergh. “The terms leave some room for interpretation and claims around sustainability are not yet systematically audited. On top of that, for many companies, CO2 is the only – or by far the most important – greenhouse gas they emit. So for them, the distinction between carbon and climate neutral is blurred.”
France is going to put an end to unjustified sustainability claims once and for all. From 1 January 2023, it will be forbidden to call a product or service carbon neutral in advertising, unless the producer substantiates the claim on its website. That must include information on the emissions caused throughout the life cycle, and a clarification of what they do to avoid, reduce and ultimately offset those emissions. A QR code in advertising or on packaging should make the information accessible. With the initiative – which took the form of an implementing decree within the French climate law – the country aims to combat greenwashing.
As an organization, what can you do to cut through the confusion and avoid making unjustified claims? “I see two simple solutions. First, in your own communication, you can clearly define what it is about. Which greenhouse gases do you include, for which scopes, and how do you offset emissions you cannot avoid?”
“Another solution is to work with a standard such as PAS 2060. That is a method developed by the British Standards Institution: a recognized certification body. The standard describes what organizations – or their activities, products, services, etc. – have to achieve in order to claim climate neutrality. Other standards are based on those principles.”
To apply PAS 2060, you need to take three steps. “First, you map the greenhouse gases you emit across all three scopes. Then you draw up an action plan with clear reduction targets, which you implement consistently. Only the emissions that remain are required to be offset. This can only be done through certified projects. Compensation thus becomes a ‘temporary final piece’ of your company’s climate strategy.”
Want to besure that your climate targets contribute to the climate goals of the Paris Agreement? Then you can have them validated by the Science Based Targets initiative (SBTi), concludes Van den Bergh: “This way, you have the guarantee that what you are doing as a company has a scientifically based impact. The big advantage of the SBTi is that it encourages organizations to be transparent about their emissions and their targets. Joining the SBTi is valued more than simply claiming that you are climate neutral with little further clarification.”
This article was first published in May 2022 and updated in December 2023.
Carbon+Alt+Delete is a cloud-based CO2 accounting software that we use to efficiently and automatically calculate our customers’ carbon footprint and develop a coherent action plan. The software is based on the Greenhouse Gas Protocol, including the Corporate Value Chain (Scope 3) Standard, and integrates emission factors from various databases (e.g. ecoinvent, IEA, AIB, etc.).
