As part of the broader goal to tackle climate change, the UK government pledged to be Net Zero by 2050. Whilst there have been wobbles in government policy, to date progress has gone well primarily driven by reducing carbon emissions from electricity generation (by approximately ¾) due to a significant decline in use of coal and a significant increase in wind and solar (now approx. 40% UK energy generation).
However, the next phase of reductions will be more challenging and the UK’s Climate Change Committee (as well as the National Audit Office) is increasingly saying that current government strategy is no longer going far enough to enable net zero by 2050.
But what is Net Zero and is it the same as Carbon neutral? Although many of the terms are used in conjunction with climate action and appear similar, there are some subtle but important differences which businesses need to be aware of to ensure they implement the appropriate strategy and effectively communicate their sustainability impact.
Carbon Neutral
The UN defines Carbon Neutral as ‘the balance between the amount of carbon dioxide emissions released into the atmosphere and the amount of carbon that is being absorbed over a period of time.’
Businesses can become carbon neutral by offsetting their total CO2 emissions through participating in activities such as reforestation or investing in renewable energy for their operations. Carbon neutrality involves measuring the total CO2 produced by the business (defined as Scopes 1 and 2 by the GHG protocol) which is often referred to as the carbon footprint and balancing these by purchasing offsets to the same value.
Net Zero
The UN defines Net Zero as “cutting carbon emissions to a small amount of residual emissions that can be absorbed and durably stored by nature and other carbon dioxide removal measures, leaving zero in the atmosphere.” Similar to Carbon Neutral, Net Zero also contributes to climate action, but what sets it apart is that it doesn’t only include carbon dioxide; it encompasses the overall balance between produced greenhouse gas emissions observed over a period of time.
Many companies, including fossil fuel companies, are claiming to have achieved carbon neutrality, sparking controversy. A significant number of these companies are relying on carbon offsetting for a substantial portion of their projected emissions reductions. Carbon offsetting is a controversial practice involving paying for projects that reduce carbon dioxide emissions, typically through activities such as maintaining forests or planting new trees, to compensate for greenhouse gases emitted elsewhere (https://www.theguardian.com/environment/2022/feb/06/amazon-ikea-nestle-biggest-carbon-net-zero-claims).
This is why there is a shift towards Net Zero because it is considered the broader approach targeting all gases, including Nitrate Oxides, Methane, and Carbon Dioxide as well as more potent group of F-gases that are used as coolants and refrigerants.
Therefore, achieving Net Zero is considered the more ambitious and challenging approach and also agreed by academics as critical to giving a chance to limit global warming to 1.5% above long term averages (as defined by the Paris Agreement).
Achieving Net Zero
Businesses can achieve their net zero emissions by categorising the different kinds of emissions they create in their own operations and in their wider value chain. These are categorised into three scopes.
Scope 1: These are all the direct activities that emit greenhouse gases in the business. These activities include the burning of fuel directly by the company (i.e. owning a property heated by a gas boiler) and emissions from company owned facilities and vehicles.
Scope 2: These are indirect activities that involve activities the company may have purchased for the organisation, primarily purchased electricity used to power buildings (including heating, lighting).
Scope 3: Everything else that enables your business operations falls under scope 3. These are also indirect activities and are considered to have about 15 categories. This scope is difficult to measure since about 65-95% of it is indirect and therefore very challenging to measure accurately. They can be further broken down into upstream and downstream.
The graphic below is a useful visual representation:
In conclusion, as the world moves towards tackling climate change and achieving sustainability goals, concepts like Net Zero and Carbon Neutral have become prominent but often confused. Understanding these terms is crucial for businesses to develop appropriate strategies and communicate their sustainability impact effectively. While Carbon Neutral focuses on balancing emitted carbon with absorption, Net Zero takes a broader approach by addressing all greenhouse gases.
As companies navigate these concepts, there is a growing shift towards Net Zero due to its comprehensive nature, encompassing not just carbon dioxide but all emissions. Businesses aiming for Net Zero need to categorise their emissions across scopes and implement strategies across their value chains.
For a deeper understanding and guidance on achieving Net Zero, we invite you to engage with us for tailored insights and solutions. Let’s work together towards a greener, more sustainable future.
Get in touch:anjuli@sustainablebusinessventures.co.uk
Links
https://www.edie.net/british-smes-moving-from-ambition-to-action-on-sustainability-survey-finds/