Net zero: key terms for businesses

As the UK works towards net zero, policies, strategies, and communications often utilise complex terms. We define many of them here – from broad concepts to specific laws.

Net zero – the balance between greenhouse gases released into and removed or prevented from reaching the atmosphere  – is essential to a liveable future.

However, net zero actions are often described using complex, sometimes confusing, terminology. Here, we’ve put together a glossary of some of the most important net zero words and phrases for businesses.

A common understanding of definitions is sure to foster clarity, consistency and effective communication and collaboration in your organisation.

Abated emissions – Abated emissions are emissions where the greenhouse gas content has been reduced through technologies (usually carbon capture).

Baseline – In the case of net zero, a baseline is the reference point against which changes in emissions are measured. For example, the UK as a whole is aiming for a 100% reduction in greenhouse gas emissions compared to levels in 1990 by 2050 (the net zero target).

Carbon budget – The carbon budget is the quantity of greenhouse gases the UK can emit (or “spend”) during a five year period. Successive carbon budgets decrease and are legally binding under the 2008 Climate Change Act. They are steps in meeting the overall 2050 net zero target and came into effect in 2008. We are currently within the fourth carbon budget (2023 to 2027) and the cap on emissions is 1,950 MtCO2e, which is a 52% reduction compared to 1990 levels. Carbon budgets must be set twelve years in advance of the start of their respective five year period. As such, the seventh carbon budget (for the years 2038 to 2042) will be set this year.

Carbon capture – Carbon capture is the removal of carbon dioxide from emissions before it enters the atmosphere. It generally takes place at large point sources like power stations or industrial facilities and is usually followed by utilisation or storage (carbon capture, utilisation, and storage, CCUS, or carbon capture and storage, CCS, respectively).

Carbon dioxide equivalent – The amount of carbon dioxide that would produce the same degree of warming as a quantity of a different greenhouse gas. It allows different greenhouse gases to be compared on the same scale.

Carbon footprint – A carbon footprint is the quantity of greenhouse gases associated with a person’s lifestyle, a product, or an organisation. Carbon footprint is a common term and is attributed with increasing public carbon literacy and environmental awareness, but there is a lot of variation in carbon footprint figures and how they are calculated.

Carbon leakage – Carbon leakage is when businesses move production elsewhere to take advantage of less stringent climate policies, or when compliant businesses are undercut by importers that do not have to adhere to strict climate regulations, all leading to greater carbon emissions than intended.

Carbon credit – A carbon credit represents a unit of carbon dioxide (or carbon dioxide equivalent) – typically one tonne – removed from or not released into the atmosphere. Carbon credits are traded on carbon markets so that organisations can compensate for or offset emission-generating activities.

Carbon net zero feasibility study – This is a review of a business’s operations to identify emission reduction opportunities. If total emission reductions are not possible, the study also involves exploration of certified offsetting options. EMS offers a tailored Carbon Net Zero Feasibility Study service. 

Carbon neutral – An organisation is carbon neutral if they balance the amount of carbon dioxide emissions they produce with removal of carbon dioxide from the atmosphere. Carbon neutrality is often used interchangeably with net zero, but tends to have a greater emphasis on offsetting and may not include greenhouse gases other than carbon dioxide.

Carbon offsetting – As many organisations are unable to reduce emissions to zero immediately (because of the time required to make technological investments and change habits), they may invest in emissions reductions or removals outside of their business. Putting money into reforestation projects is one of the most popular carbon offsetting options. However, it’s important that projects are certified to ensure they’re credible and deliver true emission reductions. See also: carbon credit.

Carbon sequestration – Carbon sequestration is the absorption of carbon from the atmosphere into soils and vegetation. It can also be an artificial process – see carbon capture.

Climate change – Climate change refers to shifts in average weather conditions. It can be natural, but, since the 1800s, has primarily been due to human-driven global warming associated with the burning of fossil fuels.

Climate Change Act 2008 – The 2008 Climate Change Act enshrines a legally-binding target to reduce greenhouse gas emissions to at least 100% below 1990 levels by 2050 (the net zero target). The Act specifies a pathway of carbon budgets every five years to reach this goal. It also requires assessment of the risks to the UK from climate change every five years and a National Adaptation Programme. The government is expected to develop policies related to these objectives. In support of this and to ensure accountability, the independent Climate Change Committee (CCC) was also created by the Act.

Climate change adaptation – Climate change adaptation is anticipating the adverse effects of climate change and taking action to minimise or prevent suffering and damage, as well as taking advantage of any possible opportunities that may arise. Under the 2008 Climate Change Act, the UK needs to have a plan for adapting to climate change (National Adaptation Programme), which should be updated every five years. The latest version was published in 2023. Individual businesses should also have a plan for adapting to climate change. Our experts can prepare this for you.

Climate change mitigation – Mitigation is preventing or reducing emissions of greenhouse gases in order to reduce the severity of climate change.  

Climate change risk assessment – The UK government is required under the 2008 Climate Change Act to publish a UK-wide climate change risk assessment every five years. The third was published in 2022. At the organisation level, a climate change risk assessment typically forms a structured process that evaluates how risks from climate change – both physical (e.g., extreme weather) and transition-related (e.g., policy shifts) – might impact a business over the short, medium, and long term. It is highly advisable for an organisation to conduct one. EMS can help you do this.

Decarbonise – Decarbonisation refers to the process of reducing or eliminating carbon dioxide emissions at the level of a country, economy, organisation, or activity.

Global warming – The increase in the Earth’s surface temperature. The current global warming trend is driven by the burning of fossil fuels, which releases greenhouse gases into the atmosphere and intensifies the greenhouse effect.

Greenhouse effect – The greenhouse effect occurs when greenhouse gases in the atmosphere trap the sun’s warmth and stop it returning to space. It is a natural phenomenon and, without it, the planet would be much colder. However, human activities (primarily the burning of fossil fuels) have intensified the process and are leading to levels of warming that disrupt processes and endanger life on Earth.

Greenhouse gas – Greenhouse gases absorb the sun’s heat as it radiates from the Earth’s surface, trapping it in the atmosphere and stopping it escaping into space. Greenhouse gases include water vapour, carbon dioxide, nitrous oxide, methane, and fluorinated gases. Many occur naturally, however, human activities have increased levels significantly.

Net zero target – The UK’s net zero target is a 100% reduction in greenhouse gas emissions compared to 1990 levels by 2050. The target is legally-binding under the 2008 Climate Change Act. Initially, the figure was an 80% reduction, but was revised in 2019 to reflect the ambition of the Paris Agreement and updates to the climate change evidence base.

Science-based targets – Science-based targets are targets for emissions reductions that align with the latest science on meeting the goals of the Paris Agreement. Science-based targets are overseen by the Science Based Targets initiative (SBTi), which develops the tools, standards, and guidance to enable companies of all sizes and across all sectors to set their targets.

Scope 1 emissions – Scope 1 refers to emissions from sources that an organisation directly owns or controls. For example, emissions from running boilers to heat its buildings or burning fuel in its fleet of (non-electric) vehicles.

Scope 2 emissions – Scope 2 refers to emissions associated with the production of the energy (usually electricity) an organisation purchases and uses (for example, to light its buildings). The emissions are indirect: they’re produced at the power station.

Scope 3 emissions – Scope 3 emissions are all other emissions associated with the company’s activities. For example,the emissions generated by its suppliers, its employees’ commutes, or by its products when customers use them.

Streamlined Energy and Carbon Reporting (SECR) – From April 2019, the SECR regulations made it mandatory for large UK companies to report on their energy use and carbon emissions in their annual Directors’ Report. We think that it is likely smaller companies will need to record their emissions soon too. Get in touch with our experts to understand your business’s net zero potential.

Whether your business is starting out on its net zero journey, or you needed a reminder of a concept particularly relevant to your current project, we hope this glossary was helpful. EMS’s experts are here to assist you in a smooth and productive transition to net zero – get in touch with us today.

Read more: We explain what the UNFCCC, Paris Agreement, and NDCs are here.