Climate neutral, net zero or climate positive strategy?

March 17, 2022

Climate neutral, net zero or climate positive strategy?

The more we become interested in sustainability, the more we are overwhelmed by the terms surrounding the sustainability discourse. Suddenly, terms like climate neutrality, net zero, climate positivity are ubiquitous. But what exactly do they mean and what do companies need to keep in mind?

If terms are used in marketing communication without addressing concrete aspects in the company, people are quick to speak of "greenwashing". Greenwashing is the accusation against companies of pretending to be environmentally conscious for marketing purposes, but in reality not making any significant sustainability efforts. Therefore, it is important to understand these terms when developing climate-related strategies.

What does climate neutrality mean?

Climate neutrality means producing no greenhouse gas emissions and applies to both individuals and organizations. It refers to the idea of producing only as many emissions as can be removed by the planet's natural absorption. Basically, climate neutrality is used as an adjective to describe companies, processes, or products that reduce emissions from their activities through climate mitigation measures (such as investing in emissions reduction technologies or carbon offsets). Greenhouse gases (GhG) embedded in the term climate neutrality include the following gases: Carbon Dioxide (CO2), Methane (CH4), and Nitrous Oxide (N2O), and the Fluorinated Greenhouse Gases (F-Gases): hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). However, for simplicity, these greenhouse gases (GHGs) are often converted to CO2 equivalents. Although CO2 neutrality is often referred to, it should be borne in mind that CO2 is not the only gas meant.

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Is there a difference between this and net zero?

Although a clear definition of the term Net Zero is still under discussion, according to the IPCC (International Panel on Climate Change) it means that all anthropogenic (i.e. man-made) greenhouse gas emissions are reduced to zero as far as possible and the remaining emissions are removed from the atmosphere by nature or by (carbon) capture technologies. The term net zero encompasses the Paris Agreement's goal of limiting global warming to no more than 1.5°C so that the worst effects of climate change can be averted. This means that CO2 levels in the atmosphere must not increase. Put simply, Net Zero is the goal of achieving global climate neutrality by 2050.

When is a company climate positive?

A climate-positive company or product goes beyond achieving Net Zero carbon emissions and adds environmental value by removing additional CO2 from the atmosphere. This overcompensation has a positive impact on the climate; in other words, climate positive equals carbon negative. Some companies claim that they are already climate positive because they overcompensate for the emissions they produce. Climate positivity seems to be the ideal that all companies should strive for. However, it is important to remember that corporate activities pose risks not only to climate, but also to health and biodiversity, which are often less visible and more difficult to assess in the short and medium term. Therefore, climate positivity and offsets must be approached carefully and in combination with resource efficiency and circular economy principles, which we believe are absolutely critical to climate action. Specifically, two different climate targets can be defined for companies: climate positive or NetZero/climate neutral. Here, it should be kept in mind that when measuring emissions and communicating the target, all CO2 emission sources along the entire supply chain must be taken into account according to the GHG Protocol. After all, those who offset emissions without full transparency and clear reduction measures can easily fall into the greenwashing trap. The Wupptertal Institute therefore recommends striving for climate neutrality not only at the company level, but also at the product level. By taking a holistic view of products, concepts of the circular economy can be implemented in addition to climate neutrality. In this way, companies anchor climate protection and sustainability as a core component of their business model. Transparency and the derivation of realistic CO2 reduction measures are thus a basic prerequisite.


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