Carbon Neutral, Net Zero, Science-Based Targets... what’s the difference?

Bringing you the latest news and insights on sustainability and the journey to Net Zero.

Gala Anania Published on Feb 02 2022

With climate action increasingly on businesses’ minds, more and more companies are making #netzero, #carbonneutral and #sciencebasedtargets pledges. What’s the difference between all these terms, and how do you know which one is best for your company?

  • Carbon neutral targets are when a company balances its greenhouse gas emissions by purchasing carbon offsets. A carbon neutral company tracks its carbon footprint, implements an emissions reduction plan, then compensates remaining emissions by purchasing carbon offsets. A carbon neutral company can choose to offset (rather than prevent) any proportion of its emissions.
  • Net zero targets are more ambitious than carbon neutral ones. Net Zero companies reduce their emissions, then compensate hard-to-decarbonise emissions with carbon offsets. Net Zero targets are consistent with the reductions needed to achieve Paris Agreement goals, which aim to keep global temperature rises below 1.5°C. Net Zero targets usually also include targets to reduce value chain emissions - although for SME’s this is encouraged but not mandatory.
  • Science-Based Targets (SBTs) are the most stringent, as they must be verified by the Science-Based Targets Initiative (SBTi). The SBTi’s approval ensures that goals are in line with the Paris Agreement’s 1.5°C ambitions. SBTs work the same way as Net Zero, except that emissions can’t be offset. SBTs also include targets to reduce value chain emissions, although this is not mandatory for SMEs.
  • Carbon Neutral, Net Zero and SBTs are not mutually exclusive; they can be complementary. For example, companies wanting to reach Net Zero can set SBT emissions reduction targets.

Which action plan is right for my company?

  • There is no one-size-fits all, but the more ambitious the goal, the stronger the opportunity to improve brand reputation, attract consumers, employees and investors. For example, SBTs may be the most challenging, but they also have a clear business case: they can boost investors’ confidence in your company, improve its profitability and competitiveness, drive innovation, and make it more resilient to changes in regulation and public policy. The SBTi’s stamp of approval proves that your company is truly committed to climate action with credible, ambitious goals.
  • To decide which climate action plan is right, the first thing you need to do is measure your carbon footprint. At MyFootprint.ai, we can help you measure your carbon footprint today and get insights about how you can reduce your emissions - schedule a meeting to see how we can support you through your climate action journey.

By Gala Anania, Climate Evangelist at myFootprint