Carbon neutral, climate neutral and net zero
‘Net zero’ means no net increase or decrease to a specific gas.
Net zero can be applied at a global, country, city or business level. For SMEs this means reducing a firm’s emissions as much as practically possible in the coming years.
‘Carbon neutral’ means no effect on the total greenhouse gas concentration of the atmosphere. Carbon neutral refers to the balance between the greenhouse gas emissions released into the atmosphere and those absorbed back from the atmosphere in carbon sinks such as forests or oceans.
‘Climate neutral’ means no effect on the climate system as a whole.
Carbon emissions and greenhouse gases
‘Carbon’ and ‘carbon emissions’ can be used as shorthand for all greenhouse gas emissions. This is because carbon dioxide is the most common greenhouse gas, however other gases such as methane also cause global warming and must be reduced.
The total amount of carbon emissions (or ‘greenhouse gases’) directly and indirectly released by a business’s activities, including in their supply chain.
Carbon footprints are also used to describe emissions associated with products or services.
Greenhouse gases (GHGs)
Greenhouse gases are emissions that contribute to climate change, such as carbon dioxide or methane released into the atmosphere by human activity.
Examples of activities which contribute to greenhouse gases are:
- electricity from fossil fuel power stations
- burning gas for heating
- driving a petrol or diesel fuelled car
According to a 2021 study by British Business Bank, SMEs produce around a third of all emissions in the UK.
Science based targets (SBT) show how much a business’s carbon emissions need to reduce, and how quickly, to be consistent with limiting global warming to 1.5 C.
This involves calculating the amount of global emissions ‘allowed’ across different economic sectors and what a fair share would be for an individual company.
The Science Based Targets Initiative provides calculation methods and advice for firms considering this approach.
Scope 1, 2 and 3 emissions
- Scope 1 direct emissions from owned or controlled sources
- Scope 2 indirect greenhouse gas (GHG) emissions associated with the purchase of electricity, steam, heat, or cooling
- Scope 3 indirect emissions other than purchased energy in Scope 2
Sustainability is a broad term that means operating in a way that meets the needs of the current generation while not undermining future generations to meet theirs. It can be applied to social and financial issues as well as environmental ones.