What's the difference between net zero and carbon neutral? - Clean Growth UK Skip to main content

What’s the difference between net zero and carbon neutral?

Whether it’s on the side of packaging or in an advert, you’ve probably seen businesses use the term carbon neutral to big up their sustainability credentials. But what does it mean, is it greenwashing, and how does it differ from net zero?

What is carbon neutral?

There are two things to note about carbon neutral. First, it only covers carbon dioxide (other greenhouse gases are available) emissions. And second, a company doesn’t have to reduce the carbon emissions it creates to achieve it.

A company can claim to be carbon neutral if it offsets its carbon dioxide emissions by investing in projects that reduce the same level of emissions elsewhere – for example, tree planting or renewable energy projects in the global south. In other words, if the company’s annual carbon footprint is ten tonnes, they can buy verified carbon offsets to the tune of 10 tonnes and hey presto, they’re carbon neutral.

While there’s nothing wrong in principle with investing in tree planting, renewable energy projects, and other offset schemes, carbon neutral falls way short of net zero.

What does net zero mean?

If carbon neutral is passive, net zero is focused on action.

To claim net zero, a company must reduce its greenhouse gas emissions by 90% compared to a baseline year. Once they’ve hit 90%, they can offset the rest.

Whether it’s reducing waste, switching to renewable energy, or cleaning up their supply chain, net zero drives companies to take positive action in reducing their impact on the planet. It’s about innovation and progress; not about carrying on as we are and paying money to cover up the mess.

Net zero also takes into account all greenhouse gas emissions. Methane, for example, is 25 times more powerful when it comes to global warming than carbon dioxide. A carbon footprint aligned to net zero factors this in.

Net zero is great for business

It’s not just the climate that benefits from net zero, business does too.

Because of the focus on doing things better – such as embracing modern technology, being less wasteful, and engaging your supply chain – there are tonnes of business benefits. Lower costs, great sustainability storytelling opportunities, a happier workforce, and a progressive outlook that will inspire customers, investors, and other stakeholders.

As the name suggests, our Net Zero 360 workshops dive deeper into net zero for business and how you accelerate your journey. You get a full day learning climate science for business, how to measure your carbon footprint, and how to put in a place an achievable net zero plan.

Check out our workshops page for Net Zero 360 dates and other free workshops, including sustainability marketing and how Clean Growth UK’s university hubs can support your net zero mission.