Net-Zero

The terms sound similar, but there are important differences—especially for companies that want to take their climate strategy seriously. We present them here in simplified form. Further information is available on the IPCC website.

Net-Zero (Net Zero emissions) is the most stringent and scientifically sound approach. Here, all greenhouse gas emissions (according to the Kyoto Protocol) are offset by removal and permanent storage from the atmosphere. The SBTi Net-Zero Standard requires companies to reduce at least 90% of their emissions before the remaining 10% can be neutralized through offsetting. Only then can a company call itself Net-Zero. This approach is long-term and is backed up by independent validation.

Climate Neutrality describes a state in which human activities have no net effect on the climate system – in other words, there is a balance between emissions released and emissions captured. The key difference to Net-Zero is that there is no uniform standard defining how much must be reduced and how much must be offset. While Net-Zero sets clear rules (e.g., the SBTi’s 90/10 rule), Climate Neutrality often remains vague – which increases the risk of greenwashing if companies do not communicate their goals transparently.

CO₂ Neutrality (or Carbon Neutrality) refers only to carbon dioxide (CO₂) – not to other greenhouse gases such as methane or nitrous oxide. Although the name suggests otherwise, the ISO 14068 standard for CO₂ Neutrality actually covers all greenhouse gases (in accordance with the Kyoto Protocol). For this reason, the German translation sometimes refers to greenhouse gas neutrality.

Further information can be found on our Website.

A company or activity is considered climate positive if it removes more greenhouse gases from the atmosphere than it produces itself. Actually, the term “climate negative” would be more accurate, as the balance would then be negative. However, because “negative” is often associated with something bad, the more positive term has become established. Unlike net-zero, there are no official definitions or validation standards for “climate positive.” While the SBTi sets clear rules for Net-Zero (e.g., 90% reduction before compensation), any company can call itself climate positive. Therefore, the recommendation for a credible climate strategy is to first set reduction targets according to the SBTi criteria before considering climate positivity.

For a long time, there was a lack of clear guidelines – and that led to confusion. Until 2021, there were no uniform standards for Net-Zero. Many companies used the terms Net-Zero, climate-neutral, or CO₂-neutral in their communications without there being any binding criteria. Often, only Scope 1 and 2 were taken into account, while the significantly larger Scope 3 emissions were ignored. This led to a flood of different claims.

It was not until 2021 that the SBTi brought clarity with its Net-Zero standard: now there are binding rules on when a company can call itself Net-Zero. The ISO 14068 (2023) standard for CO₂ Neutrality also helped to create more transparency. Despite the standards, some companies continue to use their own definitions or unclear wording. Validated SBTi targets are therefore a recognized seal of quality.

According to the SBTi Net-Zero Standard, this is not possible – and for good reason: Scope 3 emissions (indirect emissions from supply chains, products, and services) account for 70–90% of the total carbon footprint in most industries. There is a grace period for small and medium-sized enterprises (SMEs): they do not have to include their Scope 3 emissions in their near-term targets immediately. However, they are also required to take Scope 3 into account for the Net-Zero targets by 2050 at the latest.