Carbon Neutral
March 6, 2023

Carbon Neutral

Carbon neutral means achieving a net-zero carbon footprint by balancing the amount of carbon emissions produced with an equivalent amount removed. Read this blog to find out more!

What is carbon neutral?

Carbon neutrality refers to the state where an entity has achieved a net-zero carbon footprint. This means that any carbon emissions they produce are balanced by activities that remove or offset an equivalent amount of carbon from the atmosphere. The aim of achieving carbon neutrality is to reduce the negative impact of human activities on the environment and mitigate the effects of climate change. Many companies and individuals are increasingly adopting carbon-neutral practices to reduce their carbon footprint and contribute to a more sustainable future.

What is a carbon-neutral example?

These are some examples of carbon-neutral activities and projects:

Renewable energy: People and businesses can significantly reduce their carbon footprint by switching to renewable energy sources like solar, wind, or hydropower.

Carbon offsets: To balance the carbon emissions produced by an entity's operations, carbon offsets involve sponsoring programmes that lower or eliminate glasshouse gas emissions, such as reforestation, energy efficiency upgrades, or clean energy projects.

Electric vehicles: As the power system transitions to renewable energy sources, the carbon footprint of electric vehicles will continue to fall. Electric vehicles emit much fewer carbon emissions than their gasoline-powered equivalents.

Carbon capture and storage: storing carbon dioxide emissions from power stations or industrial activities underground so they won't be released into the environment.

Energy-efficient buildings: buildings intended to be energy-efficient can assist in minimising their carbon footprint by using insulation, natural lighting, and effective heating and cooling systems.

Lifestyle changes: reducing our meat intake, taking public transportation or cycling, and minimising waste are all lifestyle adjustments that can help us progress towards carbon neutrality and minimise our carbon footprint.

How do you become carbon neutral?

The general steps to being carbon neutral are as follows:

Calculate your carbon footprint: The first stage is determining how many glasshouse gases (GHG) your operations or activities generate. You can use this as a starting point to decide where to reduce your emissions.

Set reduction targets: After calculating your carbon footprint, create goals that align with your professional or personal objectives. The plan must have a deadline and be attainable.

Reducing emissions: implement measures including using renewable energy, increasing energy efficiency, decreasing waste, and implementing sustainable behaviours.

Offset remaining emissions: remaining emissions should be offset since unavoidable carbon emissions may still be inescapable despite reductions in emissions. By investing in verified carbon offsets from initiatives that eliminate or reduce GHG emissions, you can compensate for these emissions and achieve carbon neutrality.

Communicate your emissions status: Once you have achieved carbon neutrality, inform all relevant parties, including customers, suppliers, and workers, of your accomplishments. Doing so might increase awareness and inspire others to follow your lead.

Evaluate and update: To maintain carbon neutrality and advance your sustainability efforts, periodically examine your carbon footprint, reduction goals, and offsetting initiatives.

It's vital to remember that different procedures must be taken to achieve carbon neutrality depending on the company's size, sector, and location. These broad guidelines, however, can serve as a basis for creating a carbon-neutral approach.

How can I measure my carbon footprint?

Calculating your carbon footprint entails determining how much your operations or activities create glasshouse gas (GHG) emissions. The general procedures for calculating your carbon footprint are as follows:

Establish the scope: Decide the carbon footprint assessment's scope, which will depend on the size, sector, and location of the entity. As an illustration, a business might decide to evaluate emissions from its direct activities (Scope 1), the electricity it purchases (Scope 2), and its supply chain (Scope 3).

Determine all emission sources: including those caused by energy use, transportation, waste disposal, and industrial activities. Reviewing bills, invoices, and other documents will help with this.

Compute emissions: To determine the GHG emissions produced by each activity or operation, use emission factors published by trustworthy sources like government agencies or industry associations.

Aggregate emissions: Emissions can be added together once they have been computed for each source to determine the entity's overall carbon footprint.

Report findings: Share the carbon footprint assessment findings with relevant parties, including customers, suppliers, and employees, and use the data to establish reduction goals and create a plan for reaching carbon neutrality.

It's crucial to keep in mind that calculating a carbon footprint can be a challenging procedure, and to ensure proper calculation and reporting, could be required to hire an expert consultant. Also, some online resources and calculators can assist people and businesses in calculating their carbon footprint. Here are some calculating sources that can help you get started:

What are the benefits of being carbon neutral?

Many advantages can come from becoming carbon neutral, including:

Environmental advantages: Reducing glasshouse gas (GHG) emissions through carbon neutrality can help to lessen the effects of climate change, including rising temperatures, harsh weather, and sea level rise.

Cost savings: Putting carbon emission reduction measures into practice can result in cost savings, such as through increased energy efficiency, decreased waste, and the use of renewable energy sources.

Competitive advantage: Being carbon neutral can give a business a competitive edge because more and more customers are becoming environmentally aware and eager to support companies that show their commitment to sustainability.

Regulation adherence: Many nations and areas have implemented regulations and policies to reduce GHG emissions. Being carbon-neutral can help businesses abide by these laws and avoid legal trouble.

Reputational improvement: Achieving carbon neutrality can benefit a company's reputation and brand image because it shows a dedication to sustainability and ethical business practices.

Engagement of employees: Employers who prioritise sustainability are more likely to attract and keep workers who are enthusiastic about social responsibility and the environment. Being carbon-neutral can help employers do this.

Becoming carbon neutral is becoming increasingly crucial for businesses and people who wish to lessen their environmental footprint while benefiting from cost savings, increased reputation, and regulatory compliance.

What are the challenges of being carbon neutral?

While achieving carbon neutrality has many advantages, there are several obstacles that organisations may encounter. Following are a few of the main difficulties:

Cost: Implementing solutions to cut emissions and offset those that remain can be expensive, especially for individuals or small businesses. Budgeting can be challenging because carbon offset costs can vary.

Data accessibility: Accurate information on energy use, transportation, and other sources of emissions is needed to calculate a carbon footprint. This information can take time, especially for companies with complicated processes or supply chain emissions.

Complexity: Achieving carbon neutrality may require complicated calculations and processes, such as figuring out emission factors or confirming carbon offsets. Specialised knowledge may be needed, which may not be on hand internally.

Verification: To maintain the credibility of claims of carbon neutrality, it is crucial to confirm the accuracy of carbon footprint estimations and carbon offsets. Verification may be time- and money-consuming, especially for smaller organisations.

Scope: Defining the scope of a carbon footprint assessment can take time, especially for organisations with complicated operations or global supply chains.

Public perception: Some organisations could be worried about how the general public views carbon neutrality, especially if they are thought to employ carbon offsets as a "greenwashing" gimmick rather than accomplishing significant emissions reductions.

Achieving carbon neutrality can be extremely difficult, especially for smaller organisations with few resources. However, many of these obstacles can be solved with careful planning, collaborations with suppliers of carbon offsets, and a dedication to openness and sustainability.

What is carbon neutral vs carbon-free?

Although related, the phrases carbon neutral, carbon-free, and carbon zero have distinct meanings:

When an organisation achieves "carbon neutrality," its net greenhouse gas (GHG) emissions are zero. This is done by balancing the emissions it produces with an equivalent amount of carbon removals or carbon offsets. In other words, even while the entity continues to emit emissions, it takes action to reduce or eliminate them, leaving a balance of net zero emissions.

Carbon-free: When an organisation has zero greenhouse gas emissions due to its operations or activities, it is said to be carbon-free. This is often accomplished by utilising renewable energy sources, which don't emit carbon dioxide or other GHGs, such as wind, solar, or hydropower.

Carbon zero: Like carbon neutrality, carbon zero refers to a situation with no net GHG emissions. However, the term "carbon zero" is usually used to refer to organisations that have reached net zero emissions without using carbon offsets but instead through emissions reductions or carbon removal technology, including reforestation or direct air capture.

To summarise "Carbon zero [and carbon free] means emissions are not being produced. Carbon neutral means some emissions are generated but offset somewhere else to make overall emissions zero" - Idaho National Laboratory. Each of the three phrases describes different levels of ambition in reducing GHG emissions, with carbon zero being the most challenging.

What are the most important considerations when developing a carbon-neutral strategy?

There are many factors to take into account while creating a carbon-neutral strategy, but the following are some of the more crucial ones:

Carbon footprint assessment: An exhaustive carbon footprint analysis is a vital first step in creating a carbon-neutral plan. All emissions sources, including direct emissions from activities and indirect emissions from supply chains, transportation, and other sources, should be considered in this assessment.

Establishing challenging emissions reduction goals is essential for achieving carbon neutrality. The Paris Agreement's aim of reducing global warming to well below 2 °C over pre-industrial levels should be matched with the targets, which should be based on the findings of the carbon footprint assessment.

Carbon offsets: By funding initiatives that lower or eliminate GHG emissions elsewhere, carbon offsets can be a helpful tool for reaching carbon neutrality. Choosing carbon offsets from reputable, independently verified projects that adhere to industry standards is crucial.

Renewable energy: Using renewable energy sources instead of conventional ones like coal and gas can help cut emissions from operations. Entities should think about ways to use more renewable energy, like on-site generating or buying renewable energy credits.

Efficiency in energy use: Increasing efficiency can lower emissions and save money. Organisations must consider deploying energy-efficient technologies, improving HVAC systems, and reducing energy use after-hours.

Engagement in the supply chain: For many companies, the emissions from the supply chain can be a substantial source of GHG emissions. Entities should interact with suppliers and try to reduce emissions throughout the supply chain to address these emissions.

Monitoring and reporting: It's critical to monitor the status of emissions reductions to ensure the carbon-neutral strategy is on track to meet its objectives. Also, regular reporting can assist organisations in finding potential for additional emissions reductions in problem areas.

Creating a carbon-neutral strategy requires a thorough method that considers all emission sources, establishes challenging goals, and incorporates various emission reduction techniques.

What are the financial implications of becoming carbon neutral?

Depending on the strategy used and the institution's unique circumstances, becoming carbon neutral might have both financial costs and benefits. Consider some of the following financial ramifications:

Costs associated with emissions reductions: Adopting techniques for reducing emissions, such as investing in renewable energy, increasing energy efficiency, or switching to low-emission cars, may involve high upfront costs.

Expenses of carbon offsets: For an organisation to become carbon neutral, it may be necessary to buy carbon offsets to offset any excess emissions. The price of carbon offsets can change depending on the project's nature and the chosen offset standard.

Enhanced operating efficiencies: By consuming less energy and resources over time, implementing emissions reduction measures can save costs. For instance, installing energy-efficient HVAC and lighting systems can minimise utility expenses, while switching to electric vehicles can lower fuel and maintenance costs.

Improved income: By demonstrating a commitment to sustainability and lowering reputational risks connected with environmental impacts, becoming carbon neutral can give an organisation a competitive edge in the market. Increased revenue and consumer loyalty may result from this.

Access to finance: Numerous funding sources, including financiers, grantmakers, and investors, are placing more emphasis on sustainability and carbon neutrality during their decision-making procedures. Getting to carbon neutrality can open up new finance options and possibly result in cheaper interest rates.

Compliance costs: Under rules like a carbon tax or cap-and-trade system, some countries may force organisations to disclose or reduce their emissions, leading to compliance costs.

Ultimately, the costs associated with going carbon neutral will depend on the precise emissions reduction tactics and the entity's industry, size, and other aspects. Becoming carbon neutral can, however, have several advantages, such as cost savings from operational efficiencies, access to new funding options, and improved revenue from repeat business.

Why is being carbon neutral so important?

"Carbon neutrality will greatly slow down global warming and solve our energy crisis, with accompanying benefits to air quality, ecological recovery, and landscape beautification." - National Institute of Health

Climate change mitigation: Carbon dioxide and other glasshouse gases significantly cause climate change, severely threatening the environment and human health. We can lower our glasshouse gas emissions and lessen the effects of climate change by achieving carbon neutrality.

Environmental protection: Carbon emissions not only exacerbate climate change, but they also contaminate the air, water, and soil, threaten biodiversity, and devastate ecosystems. We can lessen our impact on the environment and save the earth's natural resources by turning carbon neutral.

Ensuring long-term economic stability: Infrastructure damage, supply chain disruptions, and increased expenses due to natural disasters are just a few of the adverse economic effects of climate change. Being carbon neutral may reduce these financial risks and guarantee long-term financial stability.

Addressing stakeholder expectations: Clients, investors, and other stakeholders emphasise the need for businesses to address climate change and achieve carbon neutrality. Failure to do so may result in loss of business and reputational harm.

Gaining access to new opportunities: Achieving carbon neutrality can open doors to new corporate ventures, alliances, and funding sources. Also, it can aid businesses in standing out from the competition and boost their brands' value.

Overall, mitigating climate change, preserving the environment, guaranteeing long-term economic stability, satisfying stakeholder expectations, and seizing new possibilities all depend on becoming carbon neutral. We can benefit the environment and build a more sustainable future by being carbon neutral.

Carbon neutral certifications

In New Zealand, there are numerous certificates for carbon neutrality. These are a few examples:

Enviro-Mark Solutions created the CEMARS (Certified Emissions Measurement and Reduction Scheme) certification programme to honour businesses that have quantified their glasshouse gas emissions and committed to cutting them. Organisations must adhere to a strict procedure that involves assessing their carbon footprint, defining goals for lowering their emissions, and implementing a carbon management strategy to receive CEMARS certification.

Toitu Envirocare created the Toit Carbonreduce certification programme to honour businesses that have measured their glasshouse gas emissions and are committed to lowering them. Organisations must adhere to a strict process that includes measuring their carbon footprint, setting goals for reducing their emissions, and putting a carbon management plan into practice to receive Toit's carbon reduction certification.


In conclusion, reducing the effects of climate change must start with achieving carbon neutrality. Reaching net-zero emissions entails measuring, lowering, and offsetting carbon emissions. Organisations must apply various steps, such as increasing energy efficiency, embracing renewable energy, and offsetting their remaining emissions, to become carbon neutral. Notwithstanding the logistical and financial difficulties associated with going carbon neutral, there are many advantages, such as cost savings, enhanced reputation, and lessened environmental effects. Ultimately, the shift to a low-carbon economy is essential, and by acting now, we can build a more resilient and sustainable future for everyone.