The terms "carbon neutral" and "net zero" are often used interchangeably, but they describe distinctly different commitments. Getting them confused can lead to greenwashing accusations, missed procurement opportunities, and stakeholder distrust.
Carbon neutral means achieving a balance between the CO₂ emissions your business produces and the emissions you remove or offset. The international standard is ISO 14068-1, which requires quantifying emissions, demonstrating reduction efforts, compensating through verified carbon credits, making time-bound claims, and public disclosure. A business could theoretically make no reductions and still claim carbon neutral status by purchasing sufficient offsets.
Net zero requires reducing emissions by at least 90% before using offsets for residual emissions. The Science Based Targets initiative (SBTi) Net Zero Standard requires companies to reduce value chain emissions by at least 90% before 2050, with only residual emissions (less than 10%) neutralised through permanent carbon removals. This is the higher standard.
Consider carbon neutral if you need immediate credibility, have limited ability to reduce quickly, or want a stepping stone. Choose net zero if you're committed to long-term decarbonisation, need SBTi alignment, or supply to organisations with net zero procurement requirements like the NHS.
Carbon neutral balances emissions with offsets. Net zero requires 90%+ emission reductions first, then offsets only for the residual 10%.
Net zero is the higher standard. Carbon neutral is valuable for immediate credibility and can be a stepping stone.
SBTi requires 90%+ reductions before 2050, with only residual emissions neutralised through permanent removals.