What does Net Zero really mean?

December 9, 2020

Is Net Zero the same as Carbon Neutral? What about Climate Neutral? And what do companies mean when they speak of carbon negative, climate positive or carbon removal?

A clarification by Emilien Hoet, Head of UK, ClimatePartner

 

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 article lays out what a Net Zero commitment should be and how it has evolved from the concept of Carbon or Climate Neutrality.

Carbon Neutrality / Climate Neutrality

Simply put, Carbon Neutrality is defined as having measured, reduced and offset your carbon footprint. The end result should be to have a balance between caused emissions on the one hand and avoided emissions on the other hand – thus neutrality. You’ll see it claimed by a company, on a product, an event, a website, the list goes on.  

The UN uses Climate Neutrality as an official term, which ensures that all greenhouse gases (GHG) as included as opposed to carbon dioxide only. These GHG are referred to as CO2 equivalents, which converts all GHG into one measure. Although the UN´s IPCC (Intergovernmental Panel on Climate Change) offers a clear definition for Climate Neutrality, the term Carbon Neutrality is popular in usage, mostly in the context of Net Zero discussions. Therefore, the following text refers to Carbon Neutrality only.

There are three defined categories of things that you must measure to achieve neutrality:

  • First up, is what is known in the industry as ‘Scope 1’ – these are direct emissions, e.g. the carbon emitted by a company’s vehicle fleet.
  • Scope 2’ are indirect emissions, e.g. the company’s building’s electricity.
  • Then we have ‘Scope 3’ which covers a wide range of indirect emissions such as supply chain, business travel or employee commuting.

Crucially, only Scope 1 and 2 emissions need to be offset in order for a business to claim carbon neutrality and although some companies have done this in the past, today it is generally agreed that this doesn’t go far enough.

Most consultancies and solution providers in the climate action space, including ClimatePartner, require companies to include several Scope 3 emissions categories and encourage all related emissions along a company’s value chain, including raw materials, production, logistics and packaging for example, to be included in the calculations.

Few standard bodies currently prescribe a specific carbon reduction target for companies. That’s because historically it has been difficult to do this across industries and company types. This means that 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. This is a positive first step, but a small one at best - what we all need to be aiming for is Net Zero.

Why Net Zero?

Net Zero attempts to raise the standard and fill in the gaps left by carbon neutrality by:

  • Setting a minimum target for carbon reduction, that includes a majority of Scope 3 emissions and within a set timeframe
  • Gradually evolving your offsetting projects from those which avoid carbon to those that remove carbon

Carbon reduction targets

Setting a Net Zero commitment starts by taking true responsibility for your carbon emissions and this typically 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 1000 companies including large retailers such as Tesco 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 and the size of the company. A SBT can vary in its ambition, but ideally should be aligned with limiting global warming to 1.5°C

Evolving your carbon offsetting projects

Some activists claim to be deceived by offsetting claims made by companies: likening it to paying for a clean conscience. The reality is not so simple. Reducing carbon emissions to zero, and doing so fast enough, is near impossible for most companies. Offsetting is an important part of the solution and should not be disregarded.  Offsetting is sometimes the only aggressive, responsible and useful action companies can take, right now.

In today’s society 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.

Carbon offsets currently come in two main categories:

  • Carbon Avoidance:  These make up the grand majority of carbon offset projects currently available on the market with a set of standards such as Gold Standard, VCS and Plan Vivo who review all projects and conduct regular auditing. These come in the form of many different technologies ranging from renewable energy to forestry to community-based projects. Forest conservation avoids emissions linked to deforestation, helps preserve biodiversity and provides alternative income for local communities. 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.
  • Carbon Removal:  Removal projects are part of a very nascent and emerging industry. They are currently mostly limited to nature-based solutions, the most well-known example being planting trees. The idea is that these remove emissions from the atmosphere for as long as possible (or ideally indefinitely). Other emerging areas like Blue Carbon (mangroves, sea kelp and seagrass) or Soil Carbon – for which the Gold Standard has recently released a measurement methodology – are starting to gain lots of momentum too. Engineered solutions are also gaining ground such as Direct air capture and storage (DACS). However these tend to be very expensive, do not offer any co-benefits such as supporting local communities or preserving biodiversity and for now, are largely unproven at scale.

Which one is better: carbon avoidance or carbon 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 avoids deforestation can be better for biodiversity than a monoculture tree plantation project.

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.

Finally, we need to be avoiding and reducing the carbon in the atmosphere as much as possible before we look at feasibly removing it – a little like how we should use less energy before switching to renewables. The cleanest energy is the one you don’t use. Investing in projects that help others avoid and reduce carbon is crucially important for us to all move to Net Zero, otherwise the feat of removing such an amount of carbon may simply not be feasible.

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. However, the devil is in the detail. For example, despite the impressive headline, Brewdog has not yet made a public carbon reduction target.

Carbon or climate positive is a phrase which, in my opinion, should be avoided as it can easily lead us to think we are ‘positively’ impacting the climate by purchasing more of the associated product or service. In effect you should be weary of any claims that suggest that more consumption will lead to more positive impact. Everything physical or digital product has an impact on our planet and part of the solution needs to be a substantial reduction in overall consumption.

So when you see a company talking about Net Zero (or any other similar term), consider the actual commitments that underpin it. Net Zero needs to be accompanied by strong reduction targets, preferably science based, as well as high quality offsetting.

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.

Learn more about Net Zero and Science Based Targets within our virtual workshop series. Register now for free!