The terms carbon neutral, net zero, and climate neutral are often used interchangeably. The definitions of the terms are not standardized, although there are some common understandings. In the IPCC Special Report: Global Warming of 1.5°C, the definitions are:

  • Carbon neutrality, or net-zero carbon dioxide (CO2) emissions, is achieved when your organization’s CO2 emissions are balanced globally by CO2 removal, typically over one year.
  • Net-zero emissions are achieved when your organization’s emissions of all greenhouse gases (CO2-e) are balanced by greenhouse gas removals, typically over one year.
  • Climate neutrality is achieved when organizational activities result in no net effect on the climate system. In climate-neutral claims, regional or local bio-geophysical effects have to be accounted for as well, such as radiative forcing (e.g. from aircraft condensation trails).

The terms all refer to reducing carbon footprint but vary in other important ways. Carbon neutrality is focused on domestic carbon production that is offset in another territory. Companies like Amazon are pledging to become carbon neutral by a future date.

Net zero is used to refer to larger scale economies. Countries such as the UK and China are working toward net zero carbon by 2050 and 2060, respectively, by enforcing clean energy transportation, reducing the carbon footprints for manufacturing, and the adoption of alternative power sources. Net zero also doesn’t specifically refer only to carbon, it refers to all other greenhouse gases as well.

The term is climate neutrality doesn’t apply solely to only carbon dioxide, or to all greenhouse gases, but to the overall result of human activity on the climate system in general.

Many companies in 2021 are considering their environmental impact and are formulating policies to leave a smaller carbon footprint. Consumers are demanding that climate change be addressed by the companies they deal with. Because the terms are not standardized, it can be difficult to parse exactly what a company means when they tout their new policy. Some companies are jumping on the bandwagon more for PR than for actual impact. The details of their initiatives often reveal that a sweeping pledge has little potential impact.

In response to the confusion, there are efforts underway that will attempt to demystify the environmental policy claims and make them easier for the general public to understand. A collaboration of several international non-profits, The Science Based Targets initiative is working on a global standard for corporate net zero pledges. Once created, we will have another tool in our toolkit for determining which companies are serious about combatting climate change, and which have created policies that are more about profit and less about our future world.