The differences between Carbon Neutral and Net Zero

There is a lot written in the media about Net Zero. In 2019, the UK government became the first major economy to pass a Net Zero emissions law, pledging to bring all greenhouse gas emissions to Net Zero by 2050. However, given the urgency of the climate change problem, many businesses and organisations are making their own pledges that bring that date forward. Some, for example, Sainsbury’s and Unilever, have pledged to become Net Zero by 2040, while others such as Oxfordshire County Council and North Tyneside Council have committed to being Net Zero by 2030.

Making commitments to becoming Carbon Neutral or Net Zero are more than possible for smaller businesses too. There are many sustainability programmes and opportunities that SMEs can benefit from. For example, the Net Zero Salons Programme - a collaboration between the organisation Net Zero Now and L’Oréal - hairdressing salons of all sizes across the UK now have the support and tools they’d need in order to become Net Zero businesses. And there are plenty of organisations helping SMEs across all sectors achieve ambitious Net Zero targets.

The achievement of Net Zero targets before 2050 is an ambitious aim whether your business is a multinational company or an SME. That’s why many businesses are beginning their sustainability journey with the aim to become Carbon Neutral first.

As many people are not clear about the difference between Carbon Neutral and Net Zero, we thought this would be a good time to clarify.

What is Carbon Neutral?

Carbon Neutral is a state in which a business takes steps to remove the same amount (or more) of carbon dioxide (CO₂) from the atmosphere as its activities release. This is achieved either through efforts not to create carbon emissions in the first place or through carbon offsetting - where steps are taken to ensure carbon dioxide is removed from the atmosphere and stored in a carbon sink. This is also known as carbon sequestration.

There is currently no artificial way of removing the quantity of CO₂ from the atmosphere that’s needed to tackle climate change. Thankfully, nature has already provided an effective solution in the form of forests, oceans and the soil, all of which have the ability to soak up and store carbon emissions. We must therefore protect and expand these carbon sinks; for example, if there is a forest fire, the carbon that is stored in the trees will be released back into the atmosphere, or if there is a change of land use, the carbon stored in soil will be released. This is why it is still so important to take steps to reduce the amount of CO₂ that we release into the atmosphere as well as look after our natural resources. Your business can help achieve this by becoming more energy efficient, as well as using renewable energy sources.

What is Net Zero?

Being Net Zero simply means that your business applies the same principles as carbon neutrality to all greenhouse gas emissions, for example, methane (CH₄), nitrous oxide (N₂O) and other hydrofluorocarbons.

Greenhouse Gas standards

Businesses working towards being Carbon Neutral or Net Zero use the accounting standards used by the internationally recognised Greenhouse Gas (GHG) Protocol. Carbon Neutral is covered by Scope 1 and Scope 2 emissions - these cover the emissions that a business directly causes, such as vehicle emissions, and indirect emissions such as electricity and gas. Net Zero is additionally covered by Scope 3 which covers all emissions a business is responsible for that aren’t in its direct control, for example, purchased goods and services, distribution, investments and assets.

Practical steps your business can take

If you would like to make even a small step towards becoming a Carbon Neutral or Net Zero business, check out our free Water Efficiency guide for advice and tips on how to reduce your water use.

Alternatively, book a water efficiency audit to review your water use and find out how you could make substantial savings on your water bill. You can also read more about the other kinds of services we provide such as business water services or business wastewater management.