Carbon Neutral vs. Net Zero: What's the difference?

Climate jargon can be confusing. Two of the most common terms, Carbon Neutral and Net Zero, are often used interchangeably, but they aren’t the same thing.

Both aim to tackle climate change, but the scope, approach, and level of ambition are very different. If your business is setting sustainability goals, understanding this distinction is critical.

What Does Carbon Neutral Mean?

Carbon Neutrality means balancing the carbon you emit with an equivalent amount offset elsewhere. Think of it like balancing a ledger: every tonne of emissions must be matched with a tonne reduced or absorbed.

Companies usually get there by:

• Measuring their carbon footprint (often Scope 1 + 2 emissions).
• Reducing what they can internally.
• Offsetting the rest (e.g. tree planting, carbon credits, renewable energy projects).

👉 In short: you can be “carbon neutral” today if you offset your emissions, but it doesn’t mean you’ve stopped producing them.

What Does Net Zero Mean?

Net Zero goes much further. It means reducing emissions across your entire value chain (Scope 1, 2 and 3) to as close to zero as possible, and only then balancing the unavoidable remainder by removing carbon from the atmosphere.

How businesses approach Net Zero:

• Reducing emissions through operational change, cleaner energy, and supply chain collaboration.
• Using carbon removal (reforestation, direct air capture, carbon storage) for residuals.
• Setting long-term, science-based targets in line with the Paris Agreement.

👉 In short: Net Zero means transformation, not just offsetting.

Carbon Neutral vs. Net Zero: 3 Key Differences

1. Scope of Emissions
   • Carbon Neutral: Often covers direct emissions (Scope 1 & 2).
   • Net Zero: Covers all emissions, including supply chain and product use (Scope 3).
2. Commitment & Timescale
   • Carbon Neutral: Achievable in the short term with offsets.
   • Net Zero: Requires deep operational change, usually a long-term commitment.
3. Role of Offsets
   • Carbon Neutral: Relies heavily on offsets.
   • Net Zero: Prioritises emission reductions first, with offsets as a last resort.

FAQs: Common Questions We Hear

Is carbon neutral the same as Net Zero?
No. Carbon neutrality can be achieved through offsets alone, while Net Zero requires reducing emissions across all scopes before using offsets.

Which is better for my company: Carbon Neutral or Net Zero?
It depends on your resources and ambition. Carbon Neutral can be a first step, but Net Zero is the gold standard for long-term sustainability.

Does Net Zero apply to SMEs or just large corporations?
Net Zero targets are most common among large companies, but SMEs are increasingly adopting Net Zero strategies to stay competitive and meet customer expectations.

How Futureproof Helps

Whether you’re aiming for Carbon Neutral or Net Zero, Futureproof helps you:

• Measure your carbon footprint across all scopes.
• Set targets aligned with science-based pathways.
• Automate ESG reporting and compliance.
• Build a practical roadmap to reduce emissions and achieve your goals.

👉 Ready to move from jargon to action?
Book a demo today and see how Futureproof simplifies your path to Net Zero.

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