What is net zero? A back to basics look at net zero terminology

The definition of zero carbon

The dictionary definition of zero carbon is “causing or resulting in no release of carbon dioxide into the atmosphere”. This is easy to understand but putting it into practice is a different matter- it is complex and depends on how carbon emissions are measured and quantified. For example, an electric vehicle may be zero carbon in use, but the ‘embodied carbon’ associated with the car’s manufacture and the electricity used to charge it, may result in significant GHG emissions. Different interest groups can potentially come up with very different answers to the same question.

In this article, we discuss some of the key net zero terms and their practical application as well as the organisations working to develop industry standards for net zero.

Carbon neutral

The term ‘carbon neutral’ is widely used to describe where emissions from a company, product or service are matched with carbon reductions or removals elsewhere, usually via the purchase of carbon credits (‘carbon offsetting’).

Read how we have helped one of our clients to become carbon neutral

Net zero

The exact definition of net zero is still being debated, but is more challenging than carbon neutrality, in that emerging standards and frameworks typically require:

· Consideration of the whole value chain emissions (i.e. GHG Protocol scopes 1, 2, and 3 – see below). For carbon neutrality, the scope is often narrower e.g. just direct emissions.

· Abatement of actual emissions in line with Paris Agreement reduction trajectories,

· Residual emissions ‘neutralised’ by carbon removals (rather than reductions elsewhere), at least in the long term when removal options with secure carbon storage are likely to be more available.

Nonetheless, in the absence of a universally accepted definition, it is common to see organisations using the phrase net zero rather loosely and not strictly adhering to the above...

Read about Verco’s net zero journey

Carbon emission

The term ‘carbon emission’ is also used as shorthand for the emission of all greenhouse gases (GHGs) in general. Carbon dioxide from burning fossil fuels is the most important (accounting for some 70%) source of GHG emissions globally, but other gases are important too, such as methane from the natural gas supply chain and from ruminant livestock and Nitrous Oxide from agricultural fertilisers.

In what is recognised as an extremely complex planetary process, ‘Earth System Science’ is also driven by land use changes (such as deforestation) and albedo changes (as Arctic sea ice and tundra recede), as well as other feedback loops (release of methane from deposits previously locked by permafrost), not just the gaseous composition of the atmosphere.

Carbon footprint of an organisation

This is the total greenhouse gas emissions of an organisation. For simplicity and fair comparison, GHG emissions are usually converted into their carbon dioxide equivalent (CO2e) using published conversion factors derived by sophisticated climate models.

Case study of how one of our clients has a achieved a 20% reduction in their carbon footprint

The Greenhouse Gas (GHG) Protocol

A global methodology has been developed over the last 20 years to standardise GHG emission calculations: The Greenhouse Gas Protocol maintained by the World Resources Institute and the World Business Council for Sustainable Development. This categorises GHG emissions into three ‘scopes’.

Scope 1 emissions: These are the direct emissions arising from site activities (fossil fuel combustion, refrigerant release). For a bakery this would be the burning of gas to cook the bread.

Scope 2 emissions: Are indirect emissions from site activities using energy where the emissions arise off site e.g. the use of electricity from the grid. For the bakery, this would be the emissions resulting from the grid electricity they use for lights.

Scope 3 emissions: Are all indirect emissions not included in scope 2, that occur in the value chain both upstream and downstream of the reporting entity. For the bakery this would include the emissions from growing and transporting the flour as well as transporting and selling the bread.

Read the frequently asked questions on managing scope 3 emissions

The Protocol underpins numerous reporting initiatives in which Verco is active, including The Task force on Climate-related Financial Disclosures (TCFD) , the Carbon Disclosure Project (CDP) and GRESB.

Calculating carbon emissions

Carbon emissions are typically calculated by multiplying physical units (‘activity data’) by referenced carbon emissions factors. For example, multiplying the quantity of a fuel used, by the carbon emissions per unit of fuel. For scope 3 emissions, large databases of emissions factors are used to estimate the emissions associated with the many emission-creating activities up and down value chains. Where available, supplier or product specific emission factors are used in preference to industry average factors. This is to improve accuracy and to facilitate the tracking of initiatives to reduce emissions.

The GHG Protocol sets the overall framework for carbon accounting, but work continues to apply the Protocol to different situations and make the definition of zero carbon more precise and robust.

For example, the Greenhouse Gas Protocol is developing new guidance on how companies and organisations should account for greenhouse gas emissions and carbon removals from land use, land use change, bioenergy, and related topics in their greenhouse gas inventories, building on the Corporate Standard and Scope 3 Standard (1). This is expected to be published in late 2022.

Science based targets and the Science-based Targets Initiative (SBTI).

The Science-based Targets Initiative (SBTI) are developing the first science-based global standard for corporate net-zero targets, due at the end of 2021. The SBTI have published a draft of the Net Zero Standard Criteria.

For further information on this:

Implications of the net zero draft guidance for corporates

Implications of the net zero draft guidance for real estate

Carbon offsets

While businesses take many measures to reduce their carbon footprint to the lowest level possible, there are inevitably emissions that remain. As such, some choose to compensate for all carbon emissions by purchasing carbon offsets to match their remaining footprint. The use of offsets to compensate for emissions is often contested, and the benefits of offsetting are being increasingly scrutinised. Verco, like many other companies, is committed to continue reducing its footprint as far as possible every year, to ensure offsetting becomes an increasingly small part of the solution.

To understand more about carbon offsetting and how it relates to net zero, you might be interested in our on-demand webinar:

Carbon offsetting and insetting - how can they be used in net zero pathways?

Find out more

For more information on net zero pathways, download our Net Zero ebooks:

Net Zero for industry ebook

Net Zero for real estate ebook

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