In today’s environmentally conscious world, businesses are increasingly aiming to reduce their ecological footprint. A key part of this journey is understanding and striving for carbon neutrality as a stepping stone to net zero. However, before diving into the strategies for achieving carbon neutrality, it’s crucial to clarify two often-confused terms: carbon neutral and net zero. While related, these concepts have distinct meanings that can influence your business’s approach to sustainability.
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Carbon Neutral vs. Net Zero: What’s the Difference?
The terms ‘carbon neutral’ and ‘net zero’ are frequently used interchangeably, but they have different implications in the context of environmental sustainability. Carbon neutrality focuses on offsetting the amount of carbon dioxide emitted by a business through various means, such as investing in renewable energy or reforestation projects. The goal is to balance out the carbon emissions produced by equivalent carbon savings elsewhere, effectively bringing the net emissions to zero.
Net zero, on the other hand, takes a broader approach. It encompasses not just carbon dioxide but all greenhouse gases. Achieving net zero means a business or entity reduces its greenhouse gas emissions as much as possible through concerted reduction efforts and offsets the emissions they just cannot reduce, so the total amount of greenhouse gases released into the atmosphere is zero. This holistic approach is aligned with global efforts to combat climate change, as outlined in the Paris Climate Agreement.
How Can Your Business Achieve Carbon Neutrality?
With the distinction between carbon neutral and net zero in mind, let’s explore how your business can work towards achieving carbon neutrality. This process involves several key steps:
1. Set boundaries on your key sources of carbon emissions (direct and indirect)
Where are your emissions coming from?
The first step to carbon neutrality starts with identifying your emission ‘boundaries’ – or the key sources of carbon generated by your business and its related activities. While this will differ from business to business, as a general guideline, some examples of direct emissions compared to indirect ones are provided in the table below.
2. Calculate your carbon footprint
How much waste are you producing?
Once you’ve determined your key emission sources, software is used to calculate and display your data, which we can compare with industry standards. Understanding the mix and volume of emissions is the basis for setting targeted reduction goals, pinpointing inefficiencies, and identifying the most impactful areas for improvement. Measurement is not a one-off event. It’s important to rerun calculations regularly and maintain the quality of the data being collected.
3. Create an action plan to reduce and offset emissions
What strategies are best for your business?
In alignment with your broader business goals and sustainability objectives, an action plan is crafted with the goal of outlining the best strategies to reduce your environmental impact. This will include efforts to reduce emissions around the business, identify sustainable alternative practices, and identify credible carbon offset initiatives, including the choice between VCUs (Verified Carbon Units) and ACCUs (Australian Carbon Credit Units).
4. Take action by supporting environmental projects
Which offsetting projects would you like to support?
In this step, we put the strategic action plan into action by adopting more energy-efficient technologies, raising awareness, training staff in more sustainable practices, reducing unnecessary waste, and supporting climate projects that are aligned with your organisational goals. You might support projects such as forestry plantation, river conservation, ocean clean ups, wildlife and biodiversity protection, solar farms, renewable power generation, and a variety of other issues in relation to sustainability and global climate change. While we can provide knowledge, tools, and guidance, what you support and how much investment you make is ultimately up to you.
5. Educate and engage your customers and stakeholders
How will you embed a culture of sustainability?
Let’s keep the ball rolling. Share your passion, progress, and achievements with those inside and outside of your organisation. Bring them on board, track developments, and engage people in building a culture of sustainability. We can provide you with marketing tools, systems, legislative guidance, and knowledge from local and international sources. Sharing your journey can inspire others to take action and engage with your business. It’s good for the planet, good for people, and good for the bottom line.
Why does it matter for business and what if you ignore carbon neutrality?
Tackling climate change is the defining issue of our time. Delaying action on carbon neutrality can put your business at risk. The longer a business waits, the more it lags in developing compliance capabilities and looking out of touch with public opinion, potentially damaging its reputation and long-term competitiveness.
As humans increasingly recognize the importance of ethical business, environmental action, and responsible corporate governance, demonstrating one’s track record on sustainability becomes a key concern, not just in the mind of the customer, but also in the process of attracting investors, allies, partners, and talent who share this core value. Less sustainable business models are riskier investments in the ethical economy. A carbon neutral or net zero business is a more ethical business, which is a safer, stronger, and better positioned business in the long term.
