In an era where climate change is no longer a distant threat but an immediate reality, businesses are facing mounting pressure to take meaningful action to reduce their environmental impact. Talking about climate action is complicated, and it is not surprising that marketing teams like the idea of making simple claims like "carbon neutral" and "net zero." These terms have in many cases been used interchangeably, despite having distinctly different associated criteria and implications for a company's environmental strategy. The recent backlash against the concept of carbon neutrality, exemplified by the Carbon Trust's decision to discontinue its carbon neutral certification and the EU legislation to ban Carbon Neutral Claims by 2026, underscores the evolving landscape and the need for businesses to stay informed and adaptable. This occurs at a time when companies like Apple are proudly announcing their own achievements in carbon neutrality, signalling a complex and rapidly changing conversation around corporate environmental responsibility.
As global climate goals become more urgent, understanding what you can credibly claim in relation to your climate strategy is of critical importance for all businesses.
What happened to Carbon Neutrality?
Carbon neutrality was conceived as a way of describing a business that was achieving a balance between the quantity of Greenhouse gases it was emitting to the atmosphere and the quantity of greenhouse gases that it was removing . This was often done through the purchase of carbon credits, which fund projects aimed at reducing or capturing greenhouse gas emissions.
The absence of any requirement to reduce the source emissions and the efficacy of the carbon credits themselves has in recent times cast doubts on the credibility of carbon neutrality as a strategy.
What is the Difference Between Net Zero and Carbon Neutral?
While both terms aim for a balance in carbon emissions, they are not synonymous. Carbon neutrality often involves offsetting emissions without the requirement of reducing them at their source. On the other hand, achieving Net Zero (emissions) means reducing emissions as much as possible and offsetting the remaining unavoidable emissions with carbon removals. Net Zero is a more comprehensive approach, as it targets the root cause of emissions rather than just balancing them out. For a more detailed explanation of what Net Zero fully entails, visit https://netzeronow.org/post/what-is-net-zero .
Why Has Carbon Neutrality Been Under Scrutiny?
Carbon neutrality has come under the microscope for several reasons:
- Effectiveness: The impact of carbon offset projects can take years to materialise, making their immediate effectiveness questionable.
- Greenwashing: Some businesses use carbon neutrality claims as a marketing tool without making substantial efforts to reduce their emissions.
- Diversion of Resources: Focusing solely on carbon credits can divert attention and resources from more effective long-term solutions, like optimising a business’ operations to intrinsically reduce carbon emissions at the value chain level.
- Accountability Issues: Carbon offset projects often take place in remote locations, making it challenging to monitor their effectiveness and hold them accountable for delivering promised results.
- Social and Environmental Justice Concerns: Some carbon offset projects have been criticised for negatively impacting local communities or ecosystems, raising questions about their ethical implications.
- Lack of Standardisation: The absence of universally accepted standards and regulations for carbon offset projects can lead to inconsistencies in their quality and effectiveness.
Is It All Bad?
While it's true that the market has its flaws, carbon credits - especially carbon removals which focus on removing carbon from the atmosphere - have a valuable role to play in our transition to a more sustainable future. They can offer immediate benefits and make possible projects that would otherwise lack funding.
- Strategic Funding for Maximum Impact: The carbon credit market isn't just about buying a guilt-free pass; it's about redirecting funds from wealthy countries to places that desperately need investment for climate projects which can make a real dent in global emissions.
- The Good Among the Bad: Yes, there have been instances of projects that didn't deliver as promised, but that shouldn't overshadow the high-quality credits that do exist. The key is to be discerning. Understand the factors that make a carbon credit genuinely effective (permanence, leakage, additionality,...) and invest in those.
- Immediate Steps with a Long-term View: Carbon credits offer an immediate way for businesses to take climate action, but they're most effective when part of a broader, long-term carbon reduction strategy. Think of them as a first step, or even a parallel track, that complements your ongoing Net Zero journey.
- Complementary, Not Contradictory: Purchasing carbon credits and working to reduce your own emissions are not mutually exclusive actions. In fact, they can and should be part of a holistic approach to tackling the complex and urgent challenge of climate change.
The Optimal Strategy for Businesses - Navigating the Carbon Landscape Step-by-Step
If you are feeling overwhelmed by all the carbon jargon and conflicting opinions, you are not alone. The first and most crucial step for any business looking to make a meaningful impact is to calculate their carbon footprint. This gives you a baseline, a starting point to measure all future efforts against.
Following this, businesses should establish science-based targets, which are aligned with current climate science and global climate goals.
Next, commit to achieving Net Zero emissions. This is a pledge to not only reduce your own emissions but also a pledge to offset or capture the remaining emissions that can't be eliminated.
Finally, if you are going to invest in carbon credits,
- First, make sure they are of high quality and aligned with your business values and goals.
- Second, keep the content around your footprint, targets and action plans entirely separate from the content related to your beyond value chain mitigation - your carbon credits.
- And third, don’t claim that it means your business or product has no climate impact.
Remember, carbon credits are not a get-out-of-jail-free card; they are a supplementary measure to your emission reduction efforts.
Navigating the complex world of carbon credits, carbon neutrality, and Net Zero can be daunting, but it's essential for businesses committed to making a meaningful environmental impact. The key is to approach this challenge with a comprehensive strategy that goes beyond merely offsetting emissions. By calculating your full carbon footprint, setting science-based targets, committing to Net Zero, and carefully selecting carbon credits that align with your values, you are contributing to a global effort to mitigate climate change. This multi-faceted approach not only aligns with long-term climate goals but also positions your business as a leader in corporate sustainability.
If you're looking to initiate your business's path to Net Zero, we can guide you through the process and help you invest in reliable carbon credits.
Contact us on info@netzeronow.org or head to netzeronow.org to take the first step toward a sustainable future.
