What is net zero?

The term ‘net zero’ refers to a state where the amount of greenhouse gasses (GHGs) emitted into the atmosphere is balanced by the amount removed from it.

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Achieving net zero emissions typically involves: 

• Reducing emissions: This is done by adopting cleaner technologies, using renewable energy sources, and improving energy efficiency across sectors like industry, transportation, and agriculture.
• Carbon removal and offsetting: For emissions that cannot be eliminated, techniques like biochar production or carbon capture and sequestration are used to remove carbon from the atmosphere. Some entities balance out their own emissions by purchasing carbon credits to fund projects that reduce or remove emissions elsewhere.

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Net zero is also a target countries, cities, and corporations often set – typically aiming for around or before 2050 – in alignment with the Paris Agreement. The global goals of the agreement include limiting global warming to 1.5°C above pre-industrial levels.

Companies and any private target setters use net zero standard setting organisations like the Science Based Targets initiative (SBTi) and the Oxford Net Zero Principles to ensure the targets they set are good, timely, and achievable.

On the topic of net zero, it should be noted that the terms ‘net zero’ and ‘carbon neutral’ are often mistakenly used interchangeably. ‘Carbon neutral’ refers to when a company offsets the same amount of carbon emissions as they are responsible for. To be classified as a net zero company, however, a company must offset all of their carbon emissions – enough to no longer emit any GHGs at all.

Read more: ‘Carbon neutral vs net zero – what is the difference?’

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What is a net zero strategy?

A net zero strategy is a comprehensive plan that an organisation, country, or entity develops to reduce its GHG emissions to as close to zero as possible and balance out the remainder of their emissions through carbon removal. 

The overarching goal of a net zero strategy is to effectively contribute no additional emissions to the global atmosphere.

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A net zero strategy typically includes the following eight key elements: 

1. Emission reduction targets

A net zero strategy begins with setting specific, science-based targets for reducing emissions across the entire value chain (Scope 1, 2, and 3 emissions).

These targets are aligned with global climate goals, typically include both near-term (e.g. 2030) and long-term (e.g. 2050) goals, and often follow guidance from organisations like the Science Based Targets initiative (SBTi), which we will revisit later.

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2. Emission reduction across operations

Net zero strategies focus heavily on reducing emissions from direct operations (Scope 1) and purchased energy (Scope 2). They also address indirect emissions (Scope 3) from the company’s supply chain. Indirect emissions often account for the majority of a company’s carbon footprint, making them crucial to reduce.

A core example of emission reduction is switching from fossil fuels to renewable energy – e.g. solar, wind, or hydropower, or EV adoption. Transitioning to non-fossil energy allows companies to reduce their dependence on carbon-intensive power and minimise emissions from energy use.

Read more: ‘What are Scope 1, 2, and 3 emissions?’

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5. Carbon removal and offsetting

The primary goal of a net zero strategy is to reduce emissions as much as possible. However, every organisation has some degree of unavoidable emissions.

To counter these, companies use carbon removal techniques to remove carbon dioxide from the atmosphere. Companies also use carbon offsetting to fund projects that sequester emissions, enabling them to balance out their remaining emissions. 

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6. Stakeholder engagement and supply chain collaboration

To ensure the effectiveness of a net zero strategy, it is important to engage with a wide range of stakeholders, including suppliers, customers, and governments. Companies often work with suppliers to decarbonise their supply chains. They may also encourage customers to adopt more sustainable practices or use products designed to reduce carbon footprints.

Industry partnerships and other collaborative efforts can also help accelerate progress towards net zero goals.

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7. Reporting, monitoring, and accountability

A net zero strategy should always include clear mechanisms for tracking and measuring progress – e.g. regular emissions reporting and audits. This enables companies to compare with previous results and take action to improve their reductions over time.

Many companies use third-party verification to ensure that their emission reductions are accurate and in line with their targets. 

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8. Social and economic considerations

In addition to environmental goals, net zero strategies often take into account the social and economic impacts of transitioning to low-carbon operations.

This can include protecting jobs, supporting workers in affected industries and ensuring that the transition is just and equitable.

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Net zero strategies and the Science Based Targets initiative (SBTi)

Above, we mentioned the Science Based Targets initiative (SBTi). Net zero targets are often informed by guidance from organisations like the SBTi or the Oxford Offsetting Principles: global efforts that provide companies and organisations with a clear pathway to reduce their GHG emissions in line with climate science. 

The aim of the SBTi is to help companies and organisations set targets consistent with limiting global temperature rise to well below 2°C above pre-industrial levels, with efforts to limit it to 1.5°C, as outlined in the Paris Agreement.

The SBTi plays a crucial role in relation to net zero strategies. It offers a framework for companies and organisations to set science-based targets that align with achieving net zero by 2050.

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The SBTi informs companies on net zero through:

• Net zero standard: The SBTi developed the world’s first corporate net zero standard to ensure companies commit to reducing emissions at the necessary pace and scale to limit global warming to 1.5°C.
• Deep emission reductions: Focusing on making deep cuts in emissions across the entire value chain, the SBTi ensures that the majority of emissions are eliminated before relying on carbon removal or offsets for residual emissions.
• Clear target setting: Companies aligned with the SBTi’s net zero standard must set both near-term (2030) targets to drive immediate action and long-term targets (2050) to map out the pathway to net zero.
• Credibility and accountability: By aligning with the SBTi, companies are held accountable for making real, science-backed progress. This helps prevent greenwashing and keep net zero strategies transparent, measurable, and verifiable.
• Alignment with national and global goals: Countries set their own net zero targets. The SBTi helps companies align their corporate net zero ambitions with broader national and global climate goals.
• Industry-specific pathways: By providing sector-specific guidance, the SBTi enables companies across sectors to develop net zero strategies that are realistic and achievable for their specific context.

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In short, the SBTi is a helpful way for companies and organisations to create credible, science-based net zero strategies. It ensures net zero targets are not only ambitious, but also achievable and aligned with the latest climate science.

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Ensuring a net zero future

Alongside guidance from organisations like the Science Based Targets initiative (SBTi), net zero strategies are vital in addressing and preventing the worst impacts of climate change and creating a more sustainable, resilient, and low-carbon economy.

When it comes to achieving net zero, reducing your emissions is an important and necessary step in the right direction. However, there is growing consensus that reduction is no longer enough to stay within the goals set forward in The Paris Agreement. 

To truly reach net zero, companies must offset any remaining greenhouse gas emissions through effective carbon removal. Although this can be challenging, understanding and accessing reliable carbon removal options is key to meeting these climate commitments.

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