Net Zero
Net zero refers to the state where a company’s greenhouse gas emissions are reduced to the greatest extent possible, with any small residual emissions neutralised through permanent carbon removal. It is not the same as carbon neutrality, which can rely heavily on carbon offsets without deep emission reductions.
The Science Based Targets initiative defines the net-zero standard with clear requirements:
- Deep decarbonisation: Reduce Scope 1, Scope 2, and Scope 3 emissions by at least 90% from a base year
- Neutralisation of residual emissions: Only the remaining ≤10% of emissions may be addressed through permanent carbon dioxide removal (e.g., direct air capture, biochar)
- Science-aligned timeline: Achieve net zero no later than 2050, with near-term targets showing meaningful progress by 2030
Key distinctions:
| Concept | Reduction required | Offsetting allowed | Standard |
|---|---|---|---|
| Net zero | ≥90% | Only for residual emissions (≤10%) | SBTi Net-Zero Standard |
| Carbon neutral | Any amount | Unlimited offsets permitted | PAS 2060 |
| Climate positive | >100% of emissions removed | Yes, beyond own footprint | No single standard |
Under the CSRD, companies must disclose their climate transition plans including net-zero targets and timelines under ESRS E1. Having an SBTi-validated net-zero target is increasingly expected by investors and customers.
The path to net zero begins with a comprehensive carbon footprint calculation. Dcycle’s decarbonisation tools help companies set reduction targets, model pathways, and track progress toward their net-zero commitments.
Related terms
