The sustainability space is full of complex and seemingly contradictory terminology when it comes to claims of climate action. It’s understandable if you find your mind-boggled when a political leader, business, or even individual claims to be ‘net-zero’ or ‘carbon neutral’.

55% of consumers are confused by businesses’ environmental claims

And you’re not alone - this latest research from Nature showed that 55% of consumers are confused by businesses’ environmental claims, especially the use of ‘net-zero’, demonstrating that we (i.e. anyone wanting to use sustainability language) need to get better at communicating exactly what we mean.

The most commonly used terms of ‘net-zero’, ‘carbon neutral’ and ‘climate positive’ are often used interchangeably and in conjunction with one another, however, when used correctly, there are tangible differences between them. 

The climate bathtub analogy

We often liken the climate crisis to an overflowing bathtub; the water represents greenhouse gas emissions in the earth’s atmosphere, primarily coming from a fast-flowing tap turned on by human activity and the earth’s natural carbon cycle - the drain - is unable to keep up with the rising water level. While it’s overflowing, this is leading to rising temperatures and eventually, runaway climate change (imagine the whole bathroom has flooded and the house begins to fall apart). When we refer to becoming ‘carbon neutral’ or targeting ‘net-zero emissions’, we’re essentially aiming to stop the bath from overflowing - but the way we go about this is what defines the difference between these and other commonly used terms.

 Graphic showing an overflowing bathtub, where the water coming from the tap represents the emissions produced by human activity, a blue dotted line at the top of the bath represents the earths carbon budget (the level required to stay below 1.5 - 2 degrees Celsius), the drain represents the global carbon cycle (the earth's natural methods to regulate GHG levels in the atmosphere), and the overflowing water are the GHGs causing us to reach planetary tipping points leading to run-away climate change.
The Climate Bathtub Analogy


Before we jump into the detail - a slight word of caution. The confusion around these terms largely comes from the fact that they’re defined differently by different people and organisations. We don’t want to add to this confusion by adding new definitions, so we’ve taken what we believe are the most common and reputable definitions by industry experts and explained them in a way we hope can be easily understood by anyone. However, this does mean that when you see these terms used elsewhere, there is no guarantee that their use aligns with what we’ve outlined here. 

Carbon neutral

Carbon neutral is used to describe an existing state where an individual or organisation is balancing all unavoidable emissions with carbon credits from projects that avoid or remove emissions from the atmosphere so that their emissions (aka carbon footprint) are ‘neutralised’. A carbon neutral strategy represents the action that can be taken to stop the bath from overflowing in the immediate-term, using current resources. The use of carbon credits is critical as they allow for immediate action to be taken - imagine using buckets to quickly remove large amounts of water from the bath - because significantly reducing the carbon footprint of a person or business usually requires changes that can’t happen overnight (e.g. technological investment and supply chain changes).

You might be wondering what it means to be ‘carbon neutral certified’, as opposed to simply claiming ‘carbon neutrality’. There are many ‘carbon neutral certifications’ currently available to businesses, including the Australian Government’s Climate Active program, however, not all certifications are made equal. 

The word ‘certification’ implies that an external body has played a role in measuring and offsetting that company’s carbon footprint, or has audited the work done retrospectively, in order to ensure it aligns with their pre-defined protocol. Embedded in these certifications protocols are guidelines around ‘emissions boundaries’, or in other words, a determination around which exact emissions should be measured, and how they should be measured. This is usually defined by what is within a company’s ‘reasonable control’, however you can probably already envisage how this definition leads to subjectivity and in turn, variations between how one company reaches carbon neutral certification to the next. 

Many carbon neutral certifications do not mandate the inclusion of emissions associated with a company’s supply chain (“upstream”), or the emissions created through the use of a product or service (“downstream”), referred to as Scope 3 emissions, even though these emissions can make up over 80% of a business’s carbon footprint. This is why at trace we don’t use the term certification and rather take a common-sense approach to measurement that is more comprehensive, including those Scope 3 emissions that have a material impact on a company’s footprint wherever possible. 

Net-zero (or net-zero carbon)

Net-zero describes the point in time when there is no incremental addition of greenhouse gases to the atmosphere. In this scenario, all avoidable emissions have first been reduced and then any residual emissions are removed from the atmosphere using carbon credits. For the private sector, net-zero is best defined by the Science Based Targets initiative, which requires a long-term strategy to be implemented including a plan to decarbonise a business’ value chain emissions by 90 - 95%, and then use carbon offsetting as a mechanism to achieve net-zero emissions. Because of the long-term nature of achieving net-zero, this term is most commonly used when talking about future targets.

A great visual explanation of the journey from carbon neutral (as a current state) towards net-zero (as a future target), is captured by the below graphic created by Nandos UK & Ireland. What sits behind this is a ‘net-zero roadmap’ for the company to move from carbon neutral to net-zero by 2030, outlining the ways they will continuously decarbonise their operations, hitting key reduction milestones over time, until only a small fraction of emissions is remaining to be offset.

A graphic of a chilli, usually used to represent the spice level of Nandos' food, has been repurposed to illustrate their journey from becoming carbon neutral, which they have already achieved (shown at the bottom of the chilli), to net zero, which they plan to achieve in 2030 (at the top of the chilli).
The journey from carbon neutral and net-zero illustrated by Nandos UK & Ireland


Climate positive

Climate positive refers to activities that go beyond achieving carbon neutrality to actually creating a positive environmental benefit by removing additional carbon dioxide from the atmosphere. 

Climate Positive is the term we use most to describe the outcome of being a member of trace. Why?

  1. Joining trace is a way to become carbon neutral and take immediate climate action, however, unlike ‘carbon neutral’...
  2. Climate positive actually means having a net positive impact whereby more carbon is being removed than would have been produced. At trace, we generally overestimate an organisation’s carbon emissions and encourage them to offset that amount, and we plant an additional five trees for every tonne sequestered, resulting in a truly positive impact.
  3. Unlike terms such as ‘carbon negative’ which have the same meaning, it’s a positive, inspirational term, and we think the climate conversation can always benefit from a little more positivity!

How to pick the right language for your business

1. Match your resources to your commitment

The sustainability claims you can make, and the language you use, should all be decided upon after you’ve defined your ultimate goals, and those goals should be ambitious but feasible. While we certainly encourage pushing the limits of what you think is possible in the interests of what’s best for the planet, setting impossible goals will put you on a difficult path from day one. There are many ways to become carbon neutral or climate positive; it’s important to select an approach you feel you can sustain, and selecting the right partner for your journey is critical. For example, if you know you won’t have the resources to regularly report and measure your emissions, don’t select a partner or certification protocol that will require weekly or monthly reconciliation. At trace, we work with our customers to review their annual emissions, and support independently verified projects to offset their calculated emissions. We only choose projects that have measurable social and/or ecological benefits, and we plant five trees for every tonne of carbon - making our customers climate positive.

2. Be transparent and honest 

No matter which terminology you use, the key is to be transparent about how you arrived at your choice. This includes clearly stating what you’ve chosen to include, or not include in your scope of measurement. Pointing to the progress you’ve made and accepting there’s always room to improve, rather than trying to appear perfect, is a much more authentic approach. If you feel comfortable with explaining the detail behind your claims, you’re less likely to cross the line into greenwashing territory too. You might like to use the Aussie ‘pub-test’ and ask yourself; “stripping away any marketing or technical jargon, would this seem ‘fair-dinkum’ (i.e. fair and reasonable) to the average person?

3. Work with experts for external verification

It can be nerve-wracking making a public climate commitment, especially if sustainability is not an area you work in every day. Your intentions might be good, but you might lack confidence in your knowledge about carbon management because of its complexity. But not being an expert, or having your own sustainability team to call on should not stop you from making progress towards your climate goals. This is why it’s great to get the help of experts, like the team at trace, to help you measure, manage and offset your carbon footprint as well as let you know what the best language is to use when communicating what you’ve achieved to customers and stakeholders. 

4. Clearly articulate your actions to customers & stakeholders

You know your customers best, so you’re in a great position to decide the language that will resonate best with them and how to explain the actions you’re taking. If you’re unsure about your language choices or communication strategy, perhaps consider doing some market research or testing to find out what your customers are expecting from you and what will resonate best.

For a fantastic overview of which targets and terminologies companies around the world are using, and how they’re planning to live up to their commitments, check out the Net Zero Tracker.