February 28, 2024


What Does Carbon Neutral Mean?

What Does Carbon Neutral Mean?

Carbon neutrality meaning

Carbon neutrality means achieving a balance between emitting carbon dioxide and absorbing carbon dioxide from the atmosphere in carbon sinks. This balance is aimed at achieving a net zero carbon footprint. It can be achieved through reducing emissions and compensating for what's released into the atmosphere by investing in renewable energy, energy efficiency, and other clean, low-carbon technologies. Carbon offsets, such as planting trees or investing in carbon capture and storage projects, are common methods to achieve carbon neutrality. The goal is to mitigate the impact of human activities on climate change by balancing the amount of carbon dioxide released with an equivalent amount sequestered or offset.

Carbon neutrality is the goal of reducing human-caused greenhouse gas GHG emissions to zero. Achieving carbon neutrality means reducing emissions to zero. To achieve carbon neutrality, you must first account for all greenhouse gas emissions from all sources, and then take steps to reduce emissions. Achieving carbon neutrality might include reducing energy consumption, switching to renewable energy sources, and planting trees. Trees absorb CO2 from the atmosphere, so planting trees can help offset carbon emissions from other sources.

In this article, we'll discuss what carbon neutrality means, what it doesn't, and how to achieve it utilizing AI as your guide.

How can businesses achieve carbon neutrality?

There are three ways to achieve carbon neutrality: carbon reduction, carbon offsetting and direct air capture.

Carbon reduction is the process of reducing the amount of gases emitted from all sources within a certain area. This can be done by reducing energy consumption, switching to renewable energy sources, and/or implementing energy efficiency measures.

Carbon offsetting is the process of compensating for carbon footprint by investing in projects that reduce or sequester CO2 emissions elsewhere. Carbon offsetting can be done through direct investments in climate change solutions, or through green investment funds.

Direct Air Capture (DAC) is a technology designed to remove carbon dioxide directly from the atmosphere. Unlike traditional carbon capture methods that target emissions sources such as factories or power plants, DAC systems can capture CO2 from the ambient air anywhere, making it a potentially powerful tool in the fight against climate change. DAC is an emerging technology with the potential to complement efforts to reduce greenhouse gas emissions and combat climate change. Advancements in technology and reductions in costs could make DAC an essential component of global strategies to achieve net-zero emissions.

Reducing all four scopes of carbon emissions

4 scopes of carbon emissions chart

Both Scope 1 and 2 emissions are easier to scale to plan reduction actions. Scope 1 emissions come from sources owned or controlled by the organisation, such as factories, vehicles, or office buildings. Scope 2 emissions come from the electricity or heat supplied by the organisation, such as when a company purchases energy from a utility provider. Some common reduction strategies for Scope 1 and 2 include installing energy-efficient equipment, using renewable energy sources, and switching to low-carbon transportation options.

Scope 3 emissions are especially more difficult to reduce as they are happening outside of the reporting company's walls. These emissions come from indirect sources, such as the products or services that a company sells, its employee travel, or the waste it produces. Collecting data from vendors and suppliers is also a good way to get an overview of a company's overall carbon footprint. By analysing the emission profiles of its suppliers, a business can identify opportunities for emission reductions.

Scope 4 avoided emissions data could be gathered from employees working from home with just a few simple questions and then strategising how they could be reducing emissions at home. Also, when suppliers and distributors help others in the ecosystem to avoid emissions, that data should be collected and accounted for as well.

Using carbon offsets as a part of your carbon neutral strategy

When businesses reduce their greenhouse gas emissions, they often carbon offset the remaining emissions by purchasing carbon credits. Carbon credits are financial instruments that represent the reduction of carbon footprint. When a business buys a carbon credit, it's essentially paying to have someone else's emission profile reduced. Carbon offsetting is not a perfect solution, but it can be a part of achieving climate neutrality. By purchasing carbon credits, businesses help fund emission-reduction projects around the world and make a positive impact on the environment.

If your business is looking to offset its unavoidable emissions, Net0 offers 140 fully certified, trusted and reliable offset projects around the world. Our offset projects are verified by third-party organisations, and we only work with projects that meet our strict environmental and social standards.

How is carbon neutral different from climate neutral?

Carbon neutral and climate neutral both mean that a company has reduced its greenhouse gas emissions to zero. However, climate neutrality goes a step further and also considers the company's carbon footprint from upstream and downstream sources. This means that all emissions associated with the company – not just those from its own operations – are taken into account. Carbon neutrality is more common than climate neutrality, as it's often easier for companies to reduce their Scope 1 and 2 emissions than Scope 3 and 4 emissions. Climate neutrality certification is also more rigorous, as it requires companies to take into account all of their emissions, not just direct ones.

Carbon neutral certification

Net0 carbon management platform allows businesses to buy carbon offsets to achieve carbon neutrality. The benefits include but are not limited to getting certificates and badges companies can use for promotion once they have achieved climate neutrality.

Net0 Carbon Offset Certificate
Net0 Carbon Offset Certificate

What is PAS 2060?

In 2009 the British Standards Institution (BSI) announced the development of PAS 2060 Standard for carbon neutrality. The goal was to increase the transparency of carbon neutrality with a recognised method of becoming carbon neutral. In order to achieve net zero emissions, the following is required:

  • Scope 1 and 2 measurements are required.
  • Scope 3 measurements are required if it makes up more than 1% of the total carbon footprint. (Most emissions in the value chain are scope 3).
  • The total amount must be offset with certified carbon credits from one of the following: the Clean Development Mechanism, the Joint Implementation (which are both government-regulated schemes fulfilling the Kyoto Protocol), or the Verified Carbon Standard, from the Voluntary Market.
  • Additional reductions.
  • All must be verified by a third party to avoid double counting (when two parties count the same emission reduction) or leakage (so emissions are not increased somewhere else).
  • Credits are retired from a public record within 12 months.

Benefits of a carbon-neutral certification

  • Executives interviewed by the Harvard Business Review reported that investors all agreed ESG was at the top of their preferences. Impact investing (investing in companies that bring a positive ROI while putting ESG first) is one of their top priorities.
  • Green talent has had a cumulative growth rate of 38% between 2015 and 2021 according to a LinkedIn study conducted in 2021. The fastest-growing jobs are green jobs.
  • Half of the young people worry about climate change in their daily lives and as a result, have turned their loyalty to sustainable brands.
  • Most nations have pledged to get to net zero by 2050 and even ambitious companies want to halve their emissions by 2030.
Recommended reading:

To learn more about carbon neutrality and how to get to net zero, check out more of our free articles from our academy:

• Article: How to Reduce Upstream Emissions With the Gold Standard Framework for Supplier Engagement
• Article: Carbon Neutral vs. Net Zero: What’s the Difference?
• Article: Glossary of Climate Change Terms

How can companies achieve carbon neutrality?

With these 5 steps, you'll be on your way to net zero status soon enough. We'll show you how to achieve each step individually by tracking emissions and how Net0 software can help:

1. Measure carbon emissions

Carbon emissions can be measured over time at the company or product level. GHGs including methane and nitrous oxide but mostly CO2 are measured in tonnes of CO2 equivalent (tCO2e).

Net0 alleviates the need to use consultancies as colleagues and vendors can use their own personalised dashboards to input their data about specific emissions, leaving Net0 to accurately measure carbon emissions with intuitive AI the way no other software knows how.

Net0 is fully compliant with all mandatory government regulations coming into force 2024 and all prior regulations for voluntary submissions.

We have provided you with a detailed article on scope 1, 2, and 3 emissions if you want a full breakdown of each of them. Additionally, Net0 will calculate and categorise each one for you during the reporting process (with the data you provide) so it isn't something you would need to study in detail to calculate yourself.

scope 123 emissions value chain emissions flow chart

Companies can connect Net0 with their ERP, CRM, and other systems through our extensive suite of over 10,000 out-of-the-box integrations, all powered by our AI-driven carbon accounting automation technology for ease and compatibility. It's simple to integrate your software stack with Net0, convert third-party data into emissions, and make custom integrations without a need to involve developers.

2. Strategize for carbon neutrality

Net0 gets you on the path to net zero emissions by displaying the bigger picture of your carbon footprint and making the sources of emissions stand out. We've collected a database of low-emission alternatives that can help your company achieve a strategy that's best for you and the environment. By analysing what is going into the business procedures, our clients are better enabled to make future decisions about reductions.

Net0's AI-powered tool empowers companies to choose cost-effective strategies for decarbonisation. Using MAC Curves and simulator tools, AI-led reduction planning helps with target setting and achieving realistic and profitable goals.

Finally, switching to sustainable vendors that focus on emissions reduction and elimination is a top priority in cutting CO2 emission profile if the vendors you have aren't on a path to going green.

Net0 Emissions Reduction Simulator Tool

3. Add in carbon offsetting for presently unavoidable emissions

Setting targets that are ambitious, robust, and realistic is important in the compensation and carbon offset planning stage. It will give the company a clear set of goals as they transition into net zero carbon emissions.

Offsets are a useful approach to stabilising the environment but still being able to run a thriving business. After calculating the amount of offsets you need to contribute to, then you can make offsets in Net0's platform in one click.

With Net0's data analytics, it's easy to view all of the emissions data on one central dashboard and view offsetting options. Your company can choose from over 140 projects that the platform offers, so you can offset and reduce emissions at the same time, building the perfect road map to net zero for your company.

list of carbon emissions offset projects
Net0 Certified Offset Projects

4. Get your company net zero certified

Net0 provides carbon-neutral certificates to our customers which can be displayed on websites, online stores, and printed on physical products. To obtain a certificate, a company needs to be an active user of Net0 platform and demonstrate progress towards achieving carbon neutrality. Such proof of progress shall include an actionable plan to reduce emissions, as well as practical actions to offset some of the emissions in the short term.

5. Report your progress

Net0 provides a comprehensive emissions report that the company's customers can view online by following a link online or scanning a QR code. Companies also get an investor-grade report compliant with local regulations.

• White Paper: How Net0 Brings Businesses Towards Carbon Neutrality in 5 Steps

Take action now

Organisations across the globe have made the net zero commitment regardless if they are legally obligated because they strive for a greener future and a stronger competitive edge in the Green Economy.

Net0 dashboard

Book a demo with one of our experts and experience the platform and how it will help your company achieve carbon neutrality.

Written by:

Kristin Irish

As a content writer for Net0, Kristin harnesses her expertise and enthusiasm for carbon emissions reduction, merging it with her other passion: the B2B SaaS industry. Her global outlook and dedication enrich the sustainability sector with insightful perspectives.
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