Decoding Environmental Buzzwords: Five Terms You Need to Know (Part 1)

The world of sustainability is complex. Using precise terminology makes it simpler. Misunderstandings or misuse of terms can lead to confusion in communication, strategy development, and ultimately in achieving strategic goals. At Sustained, we recognise the importance of clarity in navigating this evolving landscape. Our expertise lies in providing accurate insights and tools to help businesses effectively measure and reduce their environmental footprint across various dimensions, from carbon emissions to biodiversity preservation.

In part one this blog post, we'll delve into five pairs of commonly misused environmental terms, providing clear definitions and distinctions for each. By understanding the nuances between these terms, you'll gain clarity on how and when to use them effectively.

1. Net Zero vs. Carbon Neutral

• Net Zero: Originally defined by the IPCC as balancing greenhouse gas emissions with their removal, "net zero" has evolved, especially with guidelines from the Science Based Targets initiative (SBTi). To achieve net zero, organisations must significantly reduce their greenhouse gas emissions before offsetting the remaining emissions. This approach underscores the importance of ambitious emission reductions, allowing offsetting only for the residual emissions that cannot be eliminated through direct actions. This rigorous definition ensures that companies are genuinely working towards minimising their environmental impact, rather than relying solely on offsets.
• Carbon Neutral: This term generally means that a company balances its greenhouse gas emissions with an equivalent amount of carbon offset. However, the term is less regulated, which has led to its use as a catch-all phrase. As a result, some companies have adopted "carbon neutral" without making significant efforts to reduce their emissions, relying primarily on offsets. This has contributed to a perception that "carbon neutral" can be a superficial commitment to sustainability.

Difference: While "Net Zero" requires substantial emission reductions before offsetting, making it a more rigorous commitment, "Carbon Neutral" can sometimes be seen as a less stringent option, with the potential for companies to meet their goals without significant emission reductions. Net Zero is now the gold standard for ambitious climate action, requiring transparency and accountability in emissions reduction.

Example: A company pursuing Net Zero would implement comprehensive measures to cut emissions across its operations, such as transitioning to renewable energy, improving energy efficiency, and adopting sustainable practices. Any remaining emissions would be offset through high-quality, verified carbon credits. In contrast, a company claiming to be Carbon Neutral might purchase carbon credits to offset its entire emissions footprint without necessarily reducing its emissions first.

2. Carbon Offset vs. Carbon Credit

• Carbon Credit: A carbon credit is a permit that allows the holder to emit a certain amount of carbon dioxide or other greenhouse gases, typically one metric ton. These credits are part of regulated cap-and-trade systems or carbon markets established by governments or international agreements. In these systems, a cap is set on the total allowable emissions, and companies receive or purchase a limited number of credits. Companies that reduce their emissions below their allocated credits can sell their excess credits to others. Carbon credits are primarily used by certain industries (such as energy production, manufacturing, and aviation) to comply with legal emission limits.
• Carbon Offset: A carbon offset represents a reduction in greenhouse gas emissions to compensate for emissions occurring elsewhere. Offsets are generated by voluntary projects such as reforestation, renewable energy installations, or methane capture initiatives. These projects are often certified by independent organisations but are less regulated than carbon credits. Individuals and organisations purchase carbon offsets to voluntarily compensate for their emissions, aiming to achieve carbon neutrality or support environmental sustainability.

Difference: The key difference lies in their regulation and audience. Carbon credits are used in regulated markets and are essential for industries to meet legal emission caps. Carbon offsets, on the other hand, are used voluntarily by individuals and organisations to mitigate their carbon footprint and support specific environmental projects. Carbon credits create a market for trading emission permits, while carbon offsets fund initiatives that reduce emissions directly. It should be noted that neither of those are a replacement for reducing a company’s emissions. They are merely tools to help after efforts have been made to reduce their footprint to the maximum. 

Example: A manufacturing company might purchase carbon credits to comply with emission regulations within a cap-and-trade system. In contrast, the same company could invest in carbon offsets to compensate for its remaining emissions by supporting a reforestation project, thereby enhancing its sustainability profile.

3. Sustainability vs. Environmental Impact

• Sustainability: This refers to practices that meet present needs without compromising the ability of future generations to meet their own needs. Sustainability encompasses a broad range of factors, including economic viability, social equity, and environmental protection.
• Environmental Impact: This specifically refers to the effect that a company's actions have on the environment. It includes factors like emissions, resource consumption, waste generation, and biodiversity loss.

Difference: Sustainability is a holistic approach that includes economic and social dimensions along with environmental concerns, aiming for long-term balance. Environmental Impact is a more specific measure of the direct and indirect effects on the environment and is a component of sustainability. 

Example: A sustainable agricultural practice would consider soil health, water use, and social impacts on local communities such as job creation and economic benefits. Measuring the environmental impact of the same practice would focus specifically on factors like greenhouse gas emissions, water usage or soil erosion.

4. Green Energy vs. Clean Energy

• Green Energy: Energy generated from natural, renewable sources such as wind, solar, hydro, and geothermal. These sources are considered environmentally friendly because they have a minimal impact on the environment.
• Clean Energy: Any form of energy that produces little to no greenhouse gas emissions. This includes not only renewable sources like solar and wind but also nuclear energy, which, while not renewable, has low emissions during operation.

Difference: Green Energy is strictly from renewable sources with minimal environmental impact, while Clean Energy includes any low-emission energy sources, including non-renewables like nuclear power.

Example: A solar power plant represents Green Energy as it harnesses renewable energy from the sun. A nuclear power plant represents Clean Energy because it produces electricity with minimal greenhouse gas emissions, even though it relies on finite resources.

5. Biodegradable vs. Compostable

• Biodegradable: Materials that can be broken down by microorganisms over time into natural substances like water, carbon dioxide, and biomass. The term does not specify the timeframe or conditions needed for decomposition.
• Compostable: Materials that decompose under specific composting conditions into nutrient-rich soil without leaving toxic residue. Compostable materials break down more quickly and completely under controlled conditions, typically within a commercial or home composting environment.

Difference: Biodegradable materials can take varying amounts of time to break down and might require specific conditions, whereas compostable materials are designed to break down efficiently and safely in composting systems.

Example: A biodegradable plastic bag might break down in a landfill over several years. In contrast, a compostable food container would break down in a composting facility within a few months, turning into useful compost for soil enrichment.

Understanding the precise meanings of these key environmental terms is vital for clear communication and effective sustainability strategies. Using these distinctions, you can enhance collaboration and decision-making within your organisation. At Sustained, we provide comprehensive solutions to help businesses measure and minimise their environmental impact across various dimensions. Stay tuned for part two, where we’ll decode five more essential environmental buzzwords.