The terms “net zero” and “carbon neutral” are often used interchangeably, but they have different implications for companies. Both concepts require companies to offset their emissions through carbon offsetting, but to different extents. Net zero refers to the goal of completely balancing the amount of greenhouse gas emissions produced with the amount removed from the atmosphere, while carbon neutral implies that emissions are offset by the purchase of carbon credits.
However, carbon markets, which facilitate the trade of carbon credits, have faced criticism for their lack of transparency, accessibility, and quality of credits. As a result, some companies in the food industry, such as Nestlé and Leon, are moving away from investing in carbon offsets and instead focusing on reducing emissions within their supply chains and operations.
To address concerns about the quality of carbon credits, the Integrity Council for the Voluntary Carbon Market (ICVCM) has established global quality standards for carbon offset projects. These standards aim to drive up standards and provide buyers with confidence in their purchases.
Additionally, the Voluntary Carbon Markets Integrity Initiative (VCMI) has released a code of practice to help companies make credible environmental claims based on their use of carbon credits. The VCMI recommends purchasing high-quality credits from the ICVCM to ensure credibility.
The key advice for businesses is to use carbon credits as a contribution to global climate change mitigation efforts, rather than as a means to claim carbon neutrality. This approach emphasizes the importance of reducing and removing emissions within a company’s value chain, rather than relying solely on offsetting.
The confusion surrounding the terms “net zero” and “carbon neutral” has led to companies being cautious about investing in carbon credits due to fears of greenwashing accusations. However, new industry frameworks and clearer standards are being developed to address these concerns and promote credible climate action. Transparency and clear frameworks are essential for companies to demonstrate legitimate action and drive meaningful change in reducing emissions.
