Explainer: What Does Net Zero Actually Mean?

Defining net zero

Net zero has become one of the most widely used terms in corporate sustainability — and one of the most widely misunderstood. Companies, governments, and institutions around the world have made net zero commitments. But what does net zero actually require, and how does it differ from the other carbon-related claims that organisations make?

At its core, net zero means achieving a state where the greenhouse gases emitted into the atmosphere are balanced by the greenhouse gases removed from it. The 'net' is important — it acknowledges that for most activities, eliminating emissions entirely is not currently feasible. Some residual emissions will remain, and these need to be counterbalanced by permanent carbon removals.

The critical word here is removals, not offsets. Under the most rigorous frameworks — particularly the Science Based Targets initiative (SBTi) Corporate Net-Zero Standard — companies must first reduce their value chain emissions by at least 90% from their base year before addressing the residual through permanent carbon dioxide removal. This means planting trees, direct air capture, enhanced weathering, or other methods that physically remove CO₂ from the atmosphere — not simply purchasing credits from projects that avoid or reduce emissions elsewhere.

This is a demanding standard, and deliberately so. Net zero is intended to represent the endpoint of a genuine decarbonisation journey, not a label you can buy.

Net zero vs carbon neutral vs climate positive

The terminology in corporate climate commitments is confusing, and the distinctions matter.

Carbon neutral means that an organisation has offset its current emissions by purchasing carbon credits. Critically, carbon neutrality does not require any reduction in actual emissions. A company can increase its emissions year on year and maintain a carbon neutral claim by purchasing additional credits. The underlying emissions remain unchanged. This is why carbon neutrality claims have attracted increasing scepticism, and why the SBTi and other standards bodies have moved away from endorsing the concept.

Net zero, under the SBTi framework, requires deep, science-aligned emission reductions across the entire value chain — Scopes 1, 2, and 3. Only after achieving a 90% or greater reduction from the base year can the remaining residual emissions be addressed through permanent carbon removals. The emphasis is on reduction first, removal second.

Climate positive (or carbon negative) goes further — removing more CO₂ from the atmosphere than you emit. Very few companies have credibly achieved this, and the concept remains more aspirational than practical for most organisations.

For UK businesses, the practical distinction is between commitments that require you to actually change your operations (net zero) and commitments that allow you to maintain the status quo while writing cheques (carbon neutral). The direction of travel — from regulators, investors, and customers — is firmly toward the former.

The SBTi Net-Zero Standard

The Science Based Targets initiative provides the most widely recognised corporate framework for net zero commitments. Understanding its structure is essential for any organisation considering a net zero target.

The SBTi Net-Zero Standard has two components:

Near-term targets (5-10 years): These are reduction targets covering Scopes 1, 2, and — if Scope 3 exceeds 40% of total emissions — Scope 3. Near-term targets must be aligned with limiting global warming to 1.5°C, which typically translates to annual emission reductions of 4-7% depending on the sector. These are binding, measurable, and independently validated.

Long-term targets (by 2050 or sooner): The commitment to reduce absolute value chain emissions by at least 90% from the base year. The residual 10% (or less) can be addressed through permanent carbon dioxide removal.

The validation process is rigorous. Companies submit their base year inventory, proposed targets, and supporting methodology to the SBTi for review. Targets that do not meet the criteria — for example, those that rely too heavily on offsets or do not cover sufficient scope — are rejected.

As of 2026, over 6,000 companies globally have committed to science-based targets through the SBTi. For UK organisations, having validated targets is increasingly a differentiator in procurement processes, investment decisions, and customer relationships.

Building your net zero roadmap

The journey to net zero follows a logical sequence, regardless of your organisation's size or sector:

1. Measure: Establish a comprehensive carbon footprint covering Scopes 1, 2, and 3. This is your base year — the reference point against which all future progress is measured. The quality of your measurement determines the credibility of everything that follows.

2. Set targets: Commit to science-based reduction targets through the SBTi or an equivalent framework. Targets should cover near-term (2030) and long-term (2050) horizons, with clear interim milestones.

3. Plan: Develop a detailed reduction plan that identifies specific initiatives for each emission source. For Scope 1, this might include electrifying your vehicle fleet, replacing gas boilers with heat pumps, or upgrading refrigeration systems. For Scope 2, switching to verified renewable electricity tariffs. For Scope 3, engaging key suppliers, redesigning procurement criteria, and investing in supply chain efficiency.

4. Implement: Execute the reduction initiatives, starting with the highest-impact, most cost-effective measures. Track implementation against your plan and report on progress quarterly to maintain momentum and accountability.

5. Report and adjust: Report transparently on your progress each year — including where you are on track and where you are not. Adjust your plan based on what is and is not working. As new technologies and opportunities emerge, incorporate them into your roadmap.

6. Address the residual: As you approach the 90% reduction threshold, develop a strategy for permanent carbon removal to address remaining emissions. This might include investing in direct air capture, biochar, enhanced rock weathering, or other verified removal projects.

Carbon accounting software is the infrastructure that makes this journey manageable. Automated measurement and reporting — steps 1 and 5 — frees up your team's capacity for the work that actually reduces emissions: planning, implementing, and holding the organisation accountable.