When Net Zero Means Nothing
The language of corporate sustainability has become so inflated that it is now almost meaningless. Net zero by 2050. Carbon neutral by 2030. Climate positive by next quarter. The commitments multiply while global emissions continue to rise. Something is not adding up.
A 2023 study by the NewClimate Institute analysed the climate pledges of 25 of the world’s largest companies and found that the majority relied heavily on carbon offsets, accounting tricks, and definitions of net zero that would not survive scrutiny. Some companies counted emissions reductions in their supply chains that had not happened yet. Others purchased offsets linked to forests that satellite data showed were already degraded or had been cleared.
The Offset Problem
Carbon offsets are not inherently fraudulent. A well-designed, properly verified reforestation project that prevents deforestation and supports local communities can represent a genuine contribution to climate action. The problem is that the offset market has grown faster than the infrastructure to verify it.
The voluntary carbon market operates with limited oversight. Verification standards vary. Permanence, the guarantee that stored carbon will remain stored, is difficult to enforce. And the temptation to sell the same offset twice, or to issue credits for forests that were never at risk, has proven irresistible for some operators.
What a Real Commitment Looks Like
A credible net zero commitment has three characteristics. First, it covers all three scopes of emissions, including the supply chain and the end use of products, not just what happens inside the factory gate. Second, it sets interim targets at five-year intervals, not just a single end date decades away. Third, it limits the use of offsets to residual emissions that cannot be eliminated, rather than using them to paper over reductions that have not occurred.
The Science Based Targets initiative provides one framework for this. It is not perfect, but it is significantly more rigorous than self-declared net zero. Investors, regulators, and procurement teams would do well to treat any commitment not validated by a credible third party with appropriate scepticism.
The Cost of Cynicism
Greenwash is not just a reputational risk for the companies that practice it. It corrodes public trust in corporate sustainability more broadly, making it harder for genuinely committed organisations to be believed. It also delays the systemic changes that the science says are necessary.
The antidote is not cynicism about all corporate commitments. It is literacy about what a credible commitment actually requires, and willingness to apply that literacy consistently, to suppliers, to investees, and to one’s own organisation.