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EXPLAINER: What is 'net zero' and why does it matter?

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Monday, 7 February 2022 12:30 GMT

Solar panels are shown on the roof of the Hanover Olympic building, the first building to offer individual solar-powered net-zero apartments in Los Angeles, California, U.S., June 6, 2017. REUTERS/Mike Blake

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Many countries and companies have set targets for 'net zero' emissions to curb global warming. Meeting them will require huge changes in how we live, work and play, starting now

BARCELONA, Feb 7 (Thomson Reuters Foundation) - Alongside a growing number of countries, hundreds of companies, big and small, have made commitments to cut their climate-changing emissions to net zero in the coming decades.

But what do those promises really mean in practice?

A new report from the NewClimate Institute and Carbon Market Watch warns net-zero and carbon-neutral pledges can hide a multitude of sins, and there is a need for more information to allow consumers to work out which amount to little more than “green-washing”.

In some cases, net-zero plans from some of the world’s top corporations disguise the fact that they are not doing nearly enough to cut emissions, the two research groups said in the first edition of their "Climate Corporate Responsibility Monitor".

The analysis looking at 25 of the world’s largest corporations, many of them household names – from Amazon to IKEA, Carrefour and Google – found their net-zero pledges amount to future emissions reductions, often decades from now, of an average of just 40%.

The problems identified in the report range from a lack of specific emissions reduction targets to vagueness around which parts of the supply chain are covered and the use of carbon credits to offset company emissions instead of efforts to cut them.

Carbon Market Watch’s Gilles Dufrasne called for a ban on the use of the terms "carbon neutral" and "net zero" on products, saying they are "incredibly murky and unclear".

"The world's biggest companies have a huge responsibility to rise up to the (climate) challenge we’re facing. Today, they are failing to do so, and it is time that governments step in to regulate corporate claims and put an end to misleading advertisement," he said.

Here we take a closer look at the growing global enthusiasm for "net zero" and its importance for the climate and our economies:


It may be the latest buzzword in the world of climate action, but scientists and policy makers say it's key to keeping us safe from harm as the planet warms.

The U.N. climate science panel has said man-made carbon dioxide emissions need to fall by about 45% by 2030, from 2010 levels, and reach "net zero" by mid-century to give the world a good chance of limiting warming to 1.5 degrees Celsius and avoiding the worst impacts of climate change.

Under the 2015 Paris Agreement, nearly 200 countries said they would act to curb the rise in global average temperatures to "well below" 2 degrees Celsius above pre-industrial times and strive to keep it to a ceiling of 1.5C.

But the world has already heated up by about 1.1C and is on track for warming of close to 2.5C this century, if current pledges to rein in still-rising emissions by 2030 are implemented, researchers estimate.

Scientists say that would bring worsening extreme weather and potentially catastrophic sea level rise, making some parts of the planet uninhabitable and fuelling hunger and migration.

These risks - and mounting public pressure - are why a fast-rising number of countries, companies and others are promising to cut their planet-warming emissions to net zero by 2050 or soon after.

If the mid-century net-zero goals set so far are actually met, global warming could be kept to about 1.8C, analysts say.

Some climate activists have criticised 2050 net-zero goals for enabling countries and companies to postpone emissions reductions until a vague far-off date.


Achieving net-zero emissions isn't the same as eliminating all emissions.

It means ensuring any human-produced carbon dioxide (CO2) or other planet-warming gases that can't be avoided or locked up are removed from the atmosphere some other way.

This can be done naturally, such as by restoring forests that suck CO2 out of the air. It can also be done using technology that captures and stores emissions from power plants and factories or directly pulls CO2 from the atmosphere.

Planting more trees worldwide is a popular way to absorb and store more carbon, but human-made technologies that perform the same job remain expensive and have yet to be deployed on a large-scale.

Scientists say carbon "removals", in any form, cannot substitute for cutting greenhouse gas emissions as fast as possible.

There is fierce debate around carbon offsetting - where governments, companies and individuals pay for emissions to be reduced or avoided by clean energy and conservation projects elsewhere, which they then count as part of their own carbon-cutting efforts.



According to analysis released in November 2021 by Net Zero Tracker, national net-zero emissions goals now cover 90% of global gross domestic product, 88% of emissions and 85% of the world's population.

The initiative - led by the Energy & Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute and Oxford University’s Net Zero Initiative - also said total revenue covered by the net zero targets of publicly traded companies amounts to just over $19.5 trillion.

Corporations have tended to set targets lacking the rigour needed to deliver a timely and effective arrival at net zero, it added, but as more commitments are adopted, their integrity is slowly improving. 

Among countries, two tiny developing nations, Suriname and Bhutan, have already achieved net-zero emissions, through measures such as restoring or planting forests and adopting renewable energy, while Panama is also expected to be certified soon

Of the 136 nations with net-zero targets, countries covering only about 10% of global emissions - including Denmark, France, New Zealand, Britain and Spain - have enshrined them in law, while a further 43% have included the goal in a policy document. 

Countries accounting for about 45% of global emissions aim to achieve net zero by 2050, with others responsible for 55% having later targets.


The World Resources Institute (WRI) and the 2050 Pathways Platform - which work with governments and others on their climate commitments - say cutting emissions within national boundaries should be the priority, with efforts to offset what remains considered only after that.

Right now, countries vary in whether their net-zero targets include offsetting emissions internationally, such as by paying to protect forests in the Amazon.

Net Zero Tracker says 91% of country targets, 79% of city targets, 78% of regional targets and 48% of public company targets fail to specify if - and how - offsets will be used in net zero plans.

To be credible, net-zero targets should cover all greenhouse gases, including methane, and all economic sectors, as well as international aviation and shipping, WRI says.

Those trying to achieve net-zero emissions should do so by 2050 or earlier, with the highest-emitting countries doing the most, fastest, while plans should be crafted in consultation with those they will affect and clearly communicated, WRI says.

When it comes to companies, net-zero targets vary widely on which parts of supply chains - and sources of emissions - they cover, and are difficult to compare, says the Science Based Targets initiative (SBTi), which has released guidelines to help remedy that.

In an October report, consultancy firm Accenture found that, of the largest 1,000 listed companies across Europe’s major stock indexes, one-third had pledged to reach net-zero by 2050.

But of these, just 5% are on track to achieve their net-zero target if they continue the pace of emissions reduction from the last decade, and only 9% are on course to meet their goal by 2050.


The "Race to Zero" campaign, launched on World Environment Day in June 2020, unites businesses, cities and other organisations that aim by around mid-century to cut their planet-heating emissions to net zero.

With a growing focus on the robustness of those commitments, Race to Zero members must meet stringent criteria, including submitting a plan in line with climate science and setting interim targets to reduce emissions.

About 43% of the world’s 632 largest public companies by revenue plan to use carbon offsetting, according to Net Zero Tracker – but two-thirds of those plans fail to specify conditions on the use of carbon credits. Only 10% of companies have said they will avoid using any offsetting whatsoever. 

The steps needed to get to net zero should be incorporated now into ambitious 2030 emissions reduction targets in national plans and reflected in everyday decision-making, to avoid new investments in high-carbon technologies and infrastructure, according to WRI researcher Kelly Levin.

Last year, the International Energy Agency released a long-awaited roadmap showing how the energy sector can slash its planet-heating emissions to net zero by 2050, which it says would give the best chance of limiting global warming to 1.5C.

The agency said reaching net-zero emissions by mid-century was possible, but the pathway to get there was "narrow and requires immediate action across all countries to begin an unprecedented transformation of how energy is produced, transported and used worldwide".

This explainer was updated on Feb. 7, 2022, with information on corporate net-zero targets from a new report by the NewClimate Institute and Carbon Market Watch.

Related stories:

IN FOCUS - Achieving net-zero emissions

Consumers left in the dark as corporate net-zero plans fail to add up

More net than zero: Do carbon-cutting promises add up for the climate?

Meaningless or sensible? Net zero by 2050 divides climate community

(Reporting by Megan Rowling @meganrowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit