Net Zero
Net zero means reducing greenhouse gas emissions as close to zero as possible, with any remaining residual emissions balanced by an equivalent amount of carbon removal from the atmosphere. The SBTi Corporate Net-Zero Standard requires at least 90–95% absolute emission reductions before carbon removals can be used.
Net zero has become the dominant climate target framing for corporations, with over 4,000 companies publicly committing to net-zero targets. However, the term has been subject to misuse, with some companies claiming "net zero" through carbon offset purchases without meaningful emission reductions.
The SBTi Corporate Net-Zero Standard (2023) brought rigor to the concept. It requires: near-term targets (5–10 years) with rapid absolute reductions in Scope 1, 2, and 3; long-term targets (by 2050 at the latest) achieving at least 90–95% reduction from the base year; and neutralization of residual emissions (the remaining 5–10%) through permanent carbon dioxide removal (CDR), not conventional offsets.
The standard explicitly distinguishes between "beyond value chain mitigation" (investing in emission reductions outside the company's value chain while reducing) and "neutralization" (using carbon removals to balance residual emissions at the net-zero target year). Companies cannot claim net zero until they have achieved the deep reduction requirement.
Achieving net zero requires a robust decarbonization plan covering energy efficiency, renewable energy procurement, supply chain engagement, process changes, and emerging technologies. Continuous, auditable carbon accounting is the foundation for tracking progress.
Frequently asked questions
What does net zero mean? +
Net zero means reducing greenhouse gas emissions by 90–95% (per SBTi) and balancing any residual emissions with permanent carbon dioxide removal. It requires deep decarbonization, not just offsetting, and is typically targeted by 2050 or sooner.
What is the difference between net zero and carbon neutral? +
Carbon neutral allows offsetting current emissions without requiring deep reductions. Net zero (per SBTi) requires at least 90–95% absolute emission reductions first, with only residual emissions balanced through permanent carbon removal. Net zero is a much higher bar.
Related terms
SBTi (Science Based Targets initiative)
The Science Based Targets initiative (SBTi) is a partnership between CDP, WRI, the UN Global Compact, and WWF that defines and validates corporate greenhouse gas reduction targets consistent with the Paris Agreement goal of limiting warming to 1.5°C above pre-industrial levels.
Carbon Accounting
Carbon accounting is the systematic process of measuring, recording, and reporting the greenhouse gas (GHG) emissions produced by an organization, product, or activity. It follows standardized methodologies — most commonly the GHG Protocol — to quantify emissions across Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) categories, producing an auditable inventory that underpins disclosure, reduction planning, and regulatory compliance.
Carbon Offsets
Carbon offsets are verified emission reduction or removal credits purchased by an organization to compensate for its own greenhouse gas emissions. One carbon offset represents one tonne of CO₂e reduced or removed from the atmosphere through a project elsewhere, such as reforestation, renewable energy deployment, or methane capture.
Scope 3 Emissions
Scope 3 emissions are all indirect greenhouse gas emissions that occur in an organization's value chain — both upstream (suppliers, purchased goods, business travel, employee commuting) and downstream (product use, end-of-life treatment, investments). Scope 3 typically represents 70–90% of a company's total carbon footprint.
Decarbonization
Decarbonization is the process of reducing greenhouse gas emissions across an organization's operations and value chain through energy efficiency improvements, fuel switching, renewable energy procurement, process changes, supply chain engagement, and technology adoption. It is the operational work that turns reduction targets into real emission cuts.