Defining Net Zero: differences and challenges

The term “Net Zero” was first coined within climate science literature. In that context, its meaning is widely agreed upon: it refers to a state where global emissions of greenhouse gases (GHGs) from human activities are balanced by withdrawal of GHGs from the atmosphere. However, applying this concept at the “non-state” level – to businesses, regions and cities – has resulted in enormous variation.

The National Centre for Social Research (NatCen) were commissioned by the British Standards Institute (BSI) to conduct a project exploring this variation in how non-state actors define and implement Net Zero targets, and the barriers they face in efforts to meet them. This was to feed into an initiative called ‘Our 2050 World’, the result of collaboration between BSI, ISO and the UN’s Race to Zero Campaign, launched at COP26 in Glasgow in November 2021. A year later, at COP27, OurWorld2050 published a set of Net Zero Guidelines which drew on key findings from NatCen’s research. These guidelines seek to address the fragmented Net Zero landscape by providing a common reference point for states, regions, cities and organisations across the world.

Our research involved conducting in-depth interviews with experts in the field from across the world, and a quick-turnaround literature review. We identified seven key dimensions in which definitions of Net Zero varied:

• Offsetting: Should organisations be able to buy offsets (emission cuts or carbon removal, often located in the Global South) in order to “cancel out” their emissions?
• Scope 3: What emissions should count when an organisation is adding up their emissions? Where does responsibility lie in complex supply chains?
• Fair share: Should organisations’ emissions targets be based on what is ‘fair’, given how much they have emitted in the past? Should capacity to reduce emissions be taken into account?
• Timeframes: How long should organisations have to meet their Net Zero targets? What should their “baseline” be (when should they start counting from)?
• Target references: Should targets commit to reducing a specific number of tonnes of carbon emissions, or a certain percentage? Should targets be linked with another, wider, target such as the Paris Agreement?
• GHGs: Which greenhouse gases should be included in Net Zero targets?
• Historical emissions: Should organisations’ take responsibility for emissions they have caused in the past? If so, how far back?

Why does variation in Net Zero targets matter?

Understanding variation is important because it is a crucial first step towards achieving consistency and, therefore, concrete and measurable action against climate change. By March 2021, a third of the UK’s biggest companies had committed to reaching Net Zero by 2050 – but these developments have been largely uncoordinated (there are no mandatory Net Zero standards), and varied hugely in their level of ambition. In the absence of a common definition of Net Zero at the non-state level, stakeholders said it was difficult to consistently measure progress, and ultimately, has resulted in delays to much-needed action.

In some cases, this was due to genuine confusion about what to do on the part of well-meaning organisations. In others, the ambiguity surrounding climate targets and, specifically, the extent to which offsets can be used, has been exploited by organisations who wish to continue with business-as-usual whilst maintaining the appearance of being “Net Zero”.

This practice, known as greenwashing, has wider implications. Stakeholders were concerned that a lack of clarity over what counts as “Net Zero” threatens to undermine the concept more generally, if investors and customers cannot differentiate ambitious targets from greenwashing.

What role could Net Zero standards play?

Standards are agreed ways of doing something, designed with the aim of ensuring that people share the same expectations about a product, service or organisation. They sit roughly in the middle of a spectrum that includes ambitious voluntary initiatives at one end and binding regulation at the other end. Standards are voluntary, but can be highly influential if widely adopted, as they can generate reputational risk for non-compliant organisations. Our research found that standards could play a crucial role in providing direction and consistency in the quickly growing field of Net Zero. Standards can help overcome some of the barriers faced by non-state actors who want to reduce their emissions, by creating norms and expectations amongst investors and customers, that in turn create financial incentives for transitioning to low-carbon approaches. Following standards can help non-state actors get ahead of future regulation, as regulators often look to existing standards when writing legislation.

What’s next?

As more organisations start to adopt the new ISO guidelines, it will be important to document the benefits and challenges they experience and to understand the extent to which the guidelines help to increase the ambition of Net Zero targets. Looking ahead, there is a focus on how to ensure that small and medium sized enterprises are not left behind, not least because more stringent requirements for calculating emissions in the supply chains of larger corporates requires accurate reporting on the part of SMEs. This is supported within Government policy: the recently published Skidmore Review, commissioned to demonstrate the opportunities presented by the Net Zero transition, proposes a Help to Grow Green campaign to provide information and advice to small businesses. At NatCen, we will be keeping a close eye on these developments and seeking opportunities to contribute using our wealth of expertise in public attitudes, behaviour change and evaluation research.