Decarbonisation is increasingly gaining attention from the business community and we are noticing this in the amount of climate strategy projects carried out across Europe. In order to communicate climate targets and achievements clearly and credibly, thorough understanding of climate change-related language is crucial.

Why is this important? More and more news come up where companies are revealed to use false CO₂-Neutrality claims as we have seen with VW and ALDI Süd, which advertised with the term “climate neutral”. Since their actions are based on compensation inventories, this advertising was classified as misleading by the German Wettbewerbszentrale. To prevent greenwashing and assure a proper use of claims we need to take a closer look at the common terms and definitions.​

Carbon neutral, climate neutral, GHG neutral or net-zero – these are a few of the most commonly used and unfortunately also misused terms and, although at the first glance very similar, in reality describe different states of the corporate carbon footprint reduction pathways. For example, “carbon neutrality” is often used interchangeably with “net-zero” or “climate neutrality” although these are fundamentally different.

To claim “carbon neutral” it is sufficient for a company to simply counterbalance the CO₂ emissions through carbon offsets without the necessity to reduce any of its own emissions. The state of net-zero as per the SBTi requires deep decarbonisation within Scopes 1, 2 and 3 (where relevant) within the company by around 90% first, before the remaining GHG emissions (as per the UNFCCC/Kyoto Protocol) may be neutralised. This is just a first insight into the different terminologies. 

Have a look at our folder to read more about it and also get to know denkstatt’s approach to decarbonisation strategies!

If you have further questions about the topic, feel free to contact us. We are more than happy to support you!