Net zero definition

When it comes to climate action, companies often talk about a net zero target. But what does net zero actually mean? Simply explained, net zero describes a state in which the greenhouse gas emissions caused by humans are in global balance with the emissions that are removed from the atmosphere. The term was first defined for use in corporate contexts by the Science Based Targets initiative (SBTi).

By achieving net zero emissions, we bring the global carbon cycle back into balance. This is an important and urgent goal, in order to limit the effects of climate change. 

Carbon neutral vs. net zero

When companies reduce or avoid emissions through financing climate projects to the amount of their carbon footprint, this is referred to as carbon neutrality. The aim is to achieve a balance between the emissions caused and the emissions avoided. But what is the difference between net zero and carbon neutral (or climate neutral)?  

In simple terms, carbon neutrality means that a carbon footprint has been calculated, ideally reduced, and offset. The result is a balance between emissions caused on the one hand and emissions avoided on the other – in other words, neutrality.

The reduction of global emissions is urgently needed in the fight against the climate crisis. However, in order to be able to claim carbon neutrality for a company or products, reduction measures are currently usually only a recommendation, with the exception of the stricter requirements of a few standardisation bodies. Although the financing of climate projects is also necessary to be able to reach net zero, it is not sufficient to drive forward climate action in line with the goals of the Paris Agreement. To achieve this, we need to reduce global greenhouse gas emissions by 45% by 2030, and reach net zero by 2050. 

Why net zero?

Only a significant reduction in carbon emissions will limit the impact of the climate crisis. Time is also of the essence: certain effects on the climate will be irreversible if we reach so-called tipping points, such as the collapse of the Amazon rainforest. We therefore need to reduce emissions significantly and quickly. If we fail to do so, we will miss the targets of the Paris Agreement by the early 2030s. 

The SBTI's Corporate Net-Zero Standard

Companies have an enormous influence on the increase in, but also the reduction of, global greenhouse gas emissions. Reducing their own emissions as much as possible makes net zero an ambitious climate action goal for businesses. By setting science-based targets (SBTs), companies ensure that these reduction targets correspond to what is necessary for the respective industry and company size.  

This is achieved with the Corporate Net-Zero Standard of the SBTi. Companies set themselves a short-term reduction target and commit to reducing scope 1, 2, and 3 emissions by more than 90% by 2050. The remaining emissions are neutralised through measures that remove carbon from the atmosphere. This can be achieved with technologies such as direct air capture. In addition, the Corporate Net-Zero Standard recommends financing climate projects to avoid emissions elsewhere in the world and thus emphasise the company's own commitment to climate action. 

Climate projects: carbon avoidance and capture

What is the difference between avoiding and neutralising carbon emissions? Climate projects for carbon avoidance utilise different technologies, from renewable energy to forest protection and social impact projects. Forest protection, for example, preserves the carbon sinks that would otherwise be lost through deforestation. As an example of a social impact project, replacing traditional cooking methods with improved cookstoves avoids the emissions that would have been caused by burning wood.  

The neutralisation of emissions, or carbon removal, can be achieved with both natural and technical solutions. The aim is to remove emissions from the atmosphere and store them, ideally for an indefinite period of time. The best-known example of natural solutions is afforestation. However, technical solutions such as direct air capture and storage are also gaining ground. 

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