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Net-Zero & Carbon Neutrality – What's the difference? What do they mean?

Net-Zero & Carbon Neutrality – What's the difference? What do they mean?

When discussing sustainability credentials, the terms 'Carbon Neutral' and 'Net Zero' are frequently used interchangeably. Despite their apparent closeness, the names really relate to two distinct ideas. Many multi-national corporations and market leaders have been chastised for 'greenwashing' for using the phrases inappropriately. As a result, organisations must understand and demonstrate the distinction.

Before we look further into the differences between the two credentials, here’s a brief description of each:

Carbon Neutral - CO2 released into the atmosphere from an organisation’s activity is counteracted by an equivalent amount of carbon being removed. This is commonly done through a carbon removal project, such as tree planting.

Net Zero - involves making active changes to reduce greenhouse gas (GHG) emissions to the lowest possible amount, then utilising carbon removal strategies to offset the organisation's residual emissions. 

Net-zero is a long-term goal which has to be achieved by setting targets and making changes in accordance with these targets, often before a certain date. Whilst carbon neutrality is a short-term goal which can be achieved very quickly. The SBTi Net-Zero Standard outlines guidance on near-term target setting by 2030 and long-term target setting by 2050.


Carbon-neutrality is defined by an internationally recognised standard: PAS 2060. It entails offsetting your emissions by purchasing ‘carbon credits’ in order to prevent or reduce the release of greenhouse gases into the atmosphere (such as renewable energy projects which displace existing fossil fuel energy). To achieve carbon neutrality, an organisation must measure its emissions and match the total with its carbon offsetting, through carbon credits. The standard also states that targets for reducing emissions must be set, but no level of ambition is required. While you should always strive to reduce your company's emissions, you can achieve carbon neutrality now, regardless of whether you have reduced your emissions or not.

Carbon-neutrality can be achieved through purchasing offsets. This is done by committing to carbon removal projects that relate to renewable energy generation, forest protection & tree planting and community initiatives such as providing access to clean water. Carbon neutrality is a critical first step in a company's sustainability plan that can be accomplished right now. It can also make a good springboard towards targeting net-zero. To be carbon-neutral an organisation must cover direct emissions whilst net-zero must cover direct and indirect emissions i.e. supply chain emissions and waste disposal.


Net-zero is the most ambitious sustainability strategy, and it is something we should all strive for in the long run. The SBTi Net-Zero Standard was created to provide companies with guidance and tools for setting science-based net-zero targets. A net-zero organisation will establish and pursue 1.5°C aligned science-based targets for its entire value chain emissions. Carbon removal can compensate for any remaining 'hard-to-decarbonise' emissions.

Carbon dioxide removal technologies, also called negative emissions technologies, are separated into two divisions: nature-based solutions and technological solutions. 

Nature-based solutions entail striving to conserve and expand natural ecosystems that absorb CO2 from the atmosphere. Among these options are:

  • Reforestation – planting trees in places where trees have previously been.
  • Afforestation – planting trees where there had been no previous trees.
  • Blue carbon – supporting ocean and coastal ecosystems that remove CO2 from the environment. These include mangroves, seagrass meadows and salt marshes.
  • Soil carbon sequestration – This is a process in which CO2 is removed from the atmosphere and stored in the soil carbon pool. This process is primarily mediated by plants through photosynthesis, with carbon stored in the form of Soil Carbon Storage (SCS).
  • Biochar – entails cultivating plants that absorb CO2, heating them in the absence of oxygen to form charcoal, then adding this to the soil to sequester carbon from the atmosphere and store it in the ground.

Technological solutions collect and store CO2 from the environment using technology. Examples include:

  • Bioenergy with carbon capture and storage (BECCS) – Bioenergy with carbon capture and storage (BECCS) is the process of capturing and permanently storing carbon dioxide (CO2) from biomass (organic matter) energy generation.
  • Direct Air Capture (DAC) – captures carbon dioxide (CO2)directly from the ambient air (as opposed to capturing from point sources, such as a cement factory or biomass power plant) and generating a concentrated stream of CO2 for sequestration or utilisation or production of carbon-neutral fuel.

Forward-thinking. Building towards Net-Zero

Being net-zero for an organisation is extremely challenging due to the difficulty of reducing scope 3 (supply-chain) emissions. Cooperation with suppliers is critical to achieving the necessary long-term carbon reductions. Even if they are tough, we can and should begin actively seeking scope 3 emissions reductions. Check out the SBTi's resources for information on how to set goals for reducing emissions to meet the 1.5°C increase target. A zero-carbon plan is required to properly handle sector decarbonisation and protect the environment. The 1.5 °C target is the goal of the Paris Agreement, a legally binding treaty which calls for countries to take concerted climate action to reduce greenhouse gas emissions in order to limit global warming. Experts suggest that the 1.5°C limit is likely to be reached between 2030 and the early 2050’s, unless there is concerted action to reduce greenhouse gas emissions.

Squareco have recently become Carbon Neutral with the help of Shopify Planet, by offsetting our delivery emissions through investments in revolutionary carbon removal technologies, whilst simultaneously demonstrating our commitment to sustainability. In terms of our products, all of the garments in stock have been made using recycled materials. Most of these are made using recycled polyester, which uses less CO2 to produce in comparison to virgin polyester, as well as removing existing plastic waste from our oceans and landfill sites. All of our packaging is compostable, meaning it can be used to enrich plant growth, creating compost once you have used it. We always advise finding additional use for your packaging before disposing of it. We use ours as small bin liners for food waste, before placing it into our green waste bin. You can read more about our sustainability criteria here.

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