Carbon neutral, net-zero, carbon negative - what do they really mean?
Carbon neutral, net-zero, carbon negative - what do they really mean?
The importance of reducing carbon emissions has never been more apparent, with climate change affecting the planet on a global scale. In recent years, terms such as "carbon neutral," "net-zero," and "carbon negative" have gained popularity as companies and organizations work towards reducing their environmental impact. However, despite becoming more informed about climate change and aware of the urgency of taking action, these buzzwords might still be quite confusing or unclear for most people. Let’s take a look at the differences between these terms and what they really mean for businesses.
This also means that a company must not only balance out their GHG emissions but also reduce them to zero. Achieving net-zero requires a more significant reduction in emissions through the implementation of more sustainable practices, such as transitioning to renewable energy and reducing energy consumption, as well as set ambitious science-based targets according to the Science-based Target Initiative, for both near- and long-term. Implementing net-zero targets in line with the Paris Agreement’s 1.5 degree scenario is a crucial and essential step for rapid, clear and consistent emissions reduction. Companies may also need to invest in carbon removal technologies to offset any remaining emissions. It is important to understand that in a net-zero logic, neutralizing residual emissions should only be the final step for those emissions that cannot be otherwise eliminated.
The benefits of each approach are clear. Companies that achieve carbon neutrality or net-zero can reduce their environmental impact, increase brand reputation, and reduce costs through energy efficiency. Carbon negativity, however, offers the most significant benefits, as it involves removing carbon from the atmosphere, contributing to the fight against climate change.
Each approach also presents specific challenges, though. Achieving carbon neutrality or net-zero requires significant investment, and companies may face difficulties in reducing emissions across their entire supply chain, especially when it comes to reporting scope 3 emissions and defining clear boundaries within their supply chain. Achieving carbon negativity requires even more significant investment and may not be feasible for all companies.
Companies are not the only entities responsible for being accountable. From governments and public bodies to individual people, everyone has the ability - and responsibility - to work towards achieving carbon neutrality. This could mean switching to a vegetarian diet, opting for more sustainable travel choices, limiting wood waste, investing our money into sustainable projects or businesses, preferring second hand items over new ones, or choosing renewables for heating our homes. We all are called to do our best to make a contribution and have a positive impact on our planet starting from our daily personal choices.
Contact us today to learn more about how we can help your business take action towards a more sustainable future.
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Carbon neutral
Being carbon neutral refers to the state where a company or organization has achieved a balance between the amount of carbon emissions they produce and the amount of carbon they remove from the atmosphere. Achieving carbon neutrality involves reducing carbon emissions through various methods, such as investing in renewable energy, improving energy efficiency, and switching to a low-carbon supply chain. Additionally, carbon offsetting, which involves investing in projects that reduce or remove carbon emissions, can help companies achieve carbon neutrality.Net-zero
Net-zero, on the other hand, goes beyond carbon neutrality, aiming to eliminate or offset all greenhouse gas (GHG) emissions, not just CO2.This also means that a company must not only balance out their GHG emissions but also reduce them to zero. Achieving net-zero requires a more significant reduction in emissions through the implementation of more sustainable practices, such as transitioning to renewable energy and reducing energy consumption, as well as set ambitious science-based targets according to the Science-based Target Initiative, for both near- and long-term. Implementing net-zero targets in line with the Paris Agreement’s 1.5 degree scenario is a crucial and essential step for rapid, clear and consistent emissions reduction. Companies may also need to invest in carbon removal technologies to offset any remaining emissions. It is important to understand that in a net-zero logic, neutralizing residual emissions should only be the final step for those emissions that cannot be otherwise eliminated.
Carbon negative
The newest and most ambitious goal is carbon negative, which involves removing more carbon from the atmosphere than the company emits. Achieving carbon negativity requires a significant reduction in carbon emissions and investing in carbon removal technologies, such as afforestation, reforestation, and direct air capture. Companies may also need to collaborate with other organizations and governments to achieve this goal.The benefits of each approach are clear. Companies that achieve carbon neutrality or net-zero can reduce their environmental impact, increase brand reputation, and reduce costs through energy efficiency. Carbon negativity, however, offers the most significant benefits, as it involves removing carbon from the atmosphere, contributing to the fight against climate change.
Each approach also presents specific challenges, though. Achieving carbon neutrality or net-zero requires significant investment, and companies may face difficulties in reducing emissions across their entire supply chain, especially when it comes to reporting scope 3 emissions and defining clear boundaries within their supply chain. Achieving carbon negativity requires even more significant investment and may not be feasible for all companies.
Companies are not the only entities responsible for being accountable. From governments and public bodies to individual people, everyone has the ability - and responsibility - to work towards achieving carbon neutrality. This could mean switching to a vegetarian diet, opting for more sustainable travel choices, limiting wood waste, investing our money into sustainable projects or businesses, preferring second hand items over new ones, or choosing renewables for heating our homes. We all are called to do our best to make a contribution and have a positive impact on our planet starting from our daily personal choices.
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At BDO, we understand the importance of reducing carbon emissions and achieving sustainability goals. We offer GHG accounting and reporting services to help businesses measure, manage, and reduce their carbon footprint, and provide insights into how to achieve carbon neutrality, net-zero, or carbon negativity.Contact us today to learn more about how we can help your business take action towards a more sustainable future.
Contact us