Confused by Climate Jargon?

5th July 2023

Net Zero v Carbon Neutral

As people become more familiar with climate issues, and expectations grow for companies to take meaningful action, there’s been a big increase in claims made. And it can be very confusing.

Carbon Neutral. Carbon Negative. Net Zero. ESG (no longer CSR) - we'll save that for another post!

But what do these terms mean? 

Here’s a brief explainer:

Carbon Footprint

A measure of greenhouse gases, including carbon dioxide (CO2) and methane (CH4), emitted in a defined boundary. It is expressed as CO2e, the e meaning equivalent to the warming effect of carbon dioxide. If it is CO2 only, other greenhouse gases aren’t included.

If the footprint is for a product, it includes emissions across the full lifecycle: from the production of ingredients, materials and packaging, to processing and distribution, through to end of life energy use and waste. The footprint will be reported by what is known as a functional unit e.g. a can of 330ml beer, a packet of crisps, a pair of shoes etc

If the footprint is for a company, it includes emissions in its own operations (known as scope 1 direct emissions and scope 2 indirect emissions from electricity) and from its supply chain and customers (scope 3).

Carbon neutral

Carbon Neutral signifies investment in offsetting only. The business has balanced its carbon footprint (its own operations only or its full value chain), or its product’s carbon footprint, by buying credits or investing in projects that reduce or remove equivalent CO2 from the atmosphere.

Carbon Negative simply means it has bought credits or invested in projects that reduce or remove more carbon emissions than the company’s carbon footprint.

Offset projects can include initiatives like renewable energy projects, afforestation (planting trees), or technologies that capture and store carbon emissions.

With a big enough budget, any company can be carbon neutral once they have calculated their carbon footprint. It doesn’t require a company to make any reduction in its own emissions - it could even increase its emissions.

Investment in many of these critical projects is important as funding is otherwise lacking. It’s important to ensure that the offsets meet recognized standards, have clear methodologies, undergo independent verification, and provide transparent reporting. 

However, relying on offsets to claim carbon neutrality risks misleading people, and is subject to controversy (e.g. forest loss to fire). It also risks diverting resources from action to reduce a company’s own emissions.

Net Zero

Net zero requires a business to reduce its emissions, and then allows for offsetting to balance remaining hard to remove emissions. 

The concept is based on international targets in the Paris Agreement to limit global warming to well below 2°C above pre-industrial levels (and pursue efforts to limit warming to 1.5°C).

The UK government set a Net Zero by 2050 target - an 80% reduction in GHG emissions for the UK compared with the 1990 levels - in a 2019 amendment to the Climate Change Act 2008.

At a company level, the Science-Based Targets initiative (SBTi) provides guidance to help businesses align with the latest climate science and reduce emissions in line with the Paris Agreement goals. The reduction targets differ across industries and are usually set in two stages: the business’ own operations first, and then its supply chain. 

Reductions might be achieved through measures such as reducing consumption (e.g. using circular economy principles), improving energy efficiency and adopting renewable energy. 

Emissions that cannot be eliminated (and accepted as such by SBTi), can be offset by investing in projects that remove or absorb CO2e emissions from the atmosphere, such as reforestation or carbon capture and storage.

What can a company say?

It’s important that people are not misled by claims. Guidance has recently been published to improve the ensure claims aren’t misleading or irresponsible.

The Advertising Standards Authority has said that “:the basis of environmental claims must be clear. Unqualified claims could mislead if they omit significant information.”

The Competition and Markets Authority has said:

  • claims must be truthful and accurate
  • claims must be clear and unambiguous
  • claims must not omit or hide important relevant information
  • comparisons must be fair and meaningful
  • claims must consider the full life cycle of the product or service
  • claims must be substantiated

When a business makes claims about Carbon Neutral and Net Zero targets, it should be “clear what they are doing and how they are doing it, including providing accurate information about whether (and the degree to which) they are actively reducing the carbon emissions created in the production of their products or delivery of their services or are offsetting emissions with carbon removal”. 

For offsetting, “businesses should provide information about any scheme they are using (which should be based on recognised standards and measurements, capable of objective verification). If not, consumers could be misled into thinking that products or processes themselves generate no (or few) emissions, when this is unlikely to be the case”.

Why is all this important?

The Intergovernmental Panel on Climate Change (IPCC) has said that Global emissions must drop to net-zero by 2050 to avoid the most catastrophic impacts of climate change.

However, the concentration of greenhouse gases in our atmosphere has continued to increase. As Mike Berners-Lee says “there is no statistically valid evidence at all that humans have spotted climate change”. If aliens were watching, they’d assume we didn’t have data showing the overheating of our home or the resulting climate impacts.

We need all businesses to be taking action to reduce emissions (and governments - the news last week was that the UK government is missing climate targets “on nearly every front” and campaigners are taking legal action). We also need business to invest in repairing nature that can help us to take CO2 out of the atmosphere and put the carbon back in the ground

And we should all be able to see what is being done. We want businesses to be able to communicate their actions to their customers, so they can support the companies doing the right thing. 

We don’t want green-washing, but green-hushing doesn’t help either!


What is Toast doing?

You can read what we’re doing in our 2022 impact report

Our 2022 carbon footprint was 241.4 tCO2e. This includes emissions from grain to glass (our operational emissions are only 0.2% of our footprint). We are carbon neutral because we purchase nature-based credits to remove carbon whilst we work to reduce our emissions to achieve Net Zero.

You can support our journey towards Net Zero, and enjoy some great beer, by visiting our store.