March 3, 2022


Carbon Neutrality: What Does Carbon Neutral Mean?

Carbon Neutrality: What Does Carbon Neutral Mean?

The term "carbon neutrality" is used to describe the goal of reducing human-caused greenhouse gas GHG emissions to zero. Greenhouse gases like carbon dioxide (CO2) and methane trap heat in the atmosphere, causing Earth's temperature to rise. This process is known as the greenhouse effect, and it is responsible for the global climate change we are currently experiencing.

Achieving carbon neutrality would mean that we are no longer contributing to the greenhouse effect and therefore not causing any further damage to the Earth's climate.

What are greenhouse gas emissions?

To define "carbon neutrality"  we must first understand what greenhouse gases are and how they affect Earth's climate. Greenhouse gases are atmospheric gases that trap heat from the sun's rays inside the Earth's atmosphere. The most common gases are water vapor, carbon dioxide (CO2), methane, and ozone.

The greenhouse effect is a natural process that makes life on Earth possible. Without it, the Earth would be too cold to support life as we know it. However, the greenhouse effect has become a problem in recent years because of the increase in atmospheric greenhouse gases due to human activity. These gases are released into the atmosphere when we burn fossil fuels such as coal, oil, and natural gas.

The increased presence of GHGs in the atmosphere has caused the Earth's climate to change. The Earth is getting warmer, and this warming trend is expected to continue as long as greenhouse gas GHG emissions continue to rise. This could have serious consequences for life on Earth, including more extreme weather events, rising sea levels, and the spread of disease.

What is carbon neutrality?

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.

Many countries and companies are now working to become carbon neutral. Some have set a target date for achieving carbon neutrality, while others are working towards it gradually over time. Carbon management platforms like Net0 can help companies and countries track their progress towards carbon neutrality.

CO2 Neutral Apples in the basket

How can businesses achieve carbon neutrality?

There are two ways to achieve carbon neutrality: carbon reduction and carbon offsetting.

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.

Method 1: Carbon emissions reduction

Although there are several ways to achieve carbon neutrality by 2050, they all involve reducing carbon emissions in some way. This can be done through energy conservation, the use of renewable energy sources, or the planting of trees. It's important to note that cutting down on emissions will look different in every organisation.

Every business has different needs and a different carbon footprint. The best way for a business to reduce its carbon emissions will vary depending on its location, industry, and size. Some organisations may need to invest in new technology to reduce their energy consumption, while others may be able to make simple changes like turning off lights when they're not in use.

There are also several government initiatives and tax breaks available for businesses that want to become more environmentally friendly.

The bottom line is that there are many ways for companies to reduce their carbon footprint, and each organisation should take steps to find the best way for them to do so.

Reducing all four scopes of carbon emissions

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.

Many companies are also now using carbon management platforms to measure their emissions and track their progress towards carbon neutrality. This helps businesses identify where they can make the biggest reductions in emissions and set achievable goals.

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.

There are several ways for organisations to reduce their Scope 3 emissions. Some common strategies include reducing the environmental impact of products and services, encouraging employees to travel sustainably, and recycling or composting waste. 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.

Method 2: Carbon offsets

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 can 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.

To learn more about our carbon offsetting projects or to get started with carbon neutrality, please contact us today.

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

Carbon neutral certification helps you build a socially responsible rapport with stakeholders. Here's why:

  • 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.

The GHG Protocol is a reporting standard that is not always, yet often used, that requires companies to categorise their emissions in three scopes. Net0 is fully compliant with the GHGP.

Scope 1 - (Direct emissions) GHGs emitted on the company's premises, vehicles, fossil fuel combustion on-site, and power sources produced by them or belonging to them.

Scope 2 - (Indirect emissions) Emissions from electricity the company purchased.

Scope 3 - (Other indirect emissions) The result of value chain emissions. The upstream and downstream emission profile of the reporting company's value chain.

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
Three Scopes of Emissions

Net0's carbon emission management platform can work out how much carbon companies are emitting precisely and accurately. When companies can input data from various sources they can see everything in Net0's dashboard. Through automation, the system auto collects data from sensors and enables staff to easily input the data. It's simple to connect third-party data sources, such as ERP systems. The information that you need could be found in your invoices for energy, gas bills, and surveys to employees about indirect emissions.

screen of measuring carbon emissions software
Net0 Product Level Emissions

2. Reduce carbon footprint

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.

Depending on the sources of your emissions, your industry, and the different departments that are emitting, you have to decide what is best for your business and the environment and change strategies as you go along. There will always be inventions, new opportunities, and alternatives to reduce and eliminate carbon emissions as time goes by.

Since Net0 is built with data intelligence at its core, it offers smart analytics to guide clients in reduction strategies that can be used in the future, not only being a system of record.

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
Net0 AI-powered Simulation Tools

3. Consider carbon offsetting

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

Companies and other organisations across the globe have made the 2050 or 2030 commitment regardless if national or regional laws have been established yet because they strive for a better and green future.

Now is the time to take action! Don't hesitate any longer, the sooner you start taking steps towards your goal, the closer you will be to achieving it.

Net0 has the tools and resources necessary to help businesses reduce their carbon footprint, and our platform makes it easy for companies to find and offset emissions. Additionally, our team of experts can help businesses get certified as carbon neutral.

Net0 dashboard

Book a demo with one of our experts and experience the platform and how it will help your company get carbon-neutral certified faster and cheaper than using outside agencies.

Written by:

Sofia Fominova

As a Co-Founder of Net0, Sofia applies her experience in environmental software to help businesses reduce their carbon footprint and achieve carbon neutrality. She is an accomplished tech entrepreneur recognized for her expertise in B2B software and contributions to the field of Artificial Intelligence.
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