Climate risk glossary
Carbon Neutrality
Carbon neutrality refers to the state of achieving a balance between the carbon emissions produced by an entity (such as a company, organization, or country) and the carbon emissions removed from the atmosphere or offset through various means. This can be achieved through a combination of reducing emissions, investing in renewable energy, and offsetting remaining emissions through practices like reforestation or carbon capture and storage.
The key difference between carbon neutrality and net zero is that carbon neutrality can be achieved at any point in time by offsetting emissions, while net zero requires actual emission reductions over time, with any remaining emissions balanced by removals. Net zero is a science-based target, aligned with the goals of the Paris Agreement to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.