Net Zero has been incorporated into the main climate goals of governments around the world. The concept has come to guide national commitments, public policies and strategic decisions in sectors ranging from energy to industry. And with that, it has also entered the radar of companies, which are increasingly focused on taking action to reduce emissions and show concrete results.

But what does it really mean to be Net Zero and why has this idea become so relevant?

What is Net Zero?

The term began to gain traction in the early 2000s, but was consolidated globally in 2015 with the Paris Agreement. Signed by more than 190 countries, it set the goal of limiting the increase in global temperature to a maximum of 1.5 °C. And for this to be possible, it is necessary to achieve Net Zero on a global scale by 2050.

Being Net Zero means balancing the climate books: everything that is emitted in the form of greenhouse gases (GHG) - such as CO₂ - must be offset or removed from the atmosphere. In other words, there can still be emissions, as long as they are offset by actions that reduce or capture the same amount of carbon.

If a company emits 100 tons of CO₂ and manages to remove or offset that same 100 tons, it achieves Net Zero, for example.

Net Zero vs. Carbon Neutral: what's the difference?

Although often used synonymously, Net Zero and Carbon Neutral have different meanings, especially in relation to the scope of emissions and how the results are achieved.

Carbon neutrality refers only to carbon dioxide (CO₂), the main greenhouse gas. In this case, the focus is on measuring how much CO₂ is being emitted and offsetting this amount through actions such as reforestation, carbon credits or investments in clean energy. It's a more flexible approach that can be applied to specific activities, such as events, products or specific campaigns.

Net Zero, on the other hand, is more comprehensive. It involves all greenhouse gases, such as methane (CH₄) and nitrogen oxides (NOₓ), and requires the company or organization to reduce its emissions significantly, rather than just offsetting them. Offsetting only comes in at the end of the process, to balance out emissions that are really unavoidable.

Another important difference lies in the timeframe and commitment. Carbon neutral can be achieved quickly through offsets. Net Zero, on the other hand, is a long-term goal that requires a deeper transformation: changes in processes, products, supply chains and energy sources.

How are emissions measured?

To plan any reduction or compensation action, the first step is to know how much you are emitting and where these emissions come from.

The main tool used globally to measure emissions is the GHG Protocol (Greenhouse Gas Protocol), which helps companies identify all the emission sources in their value chain.

From this, it is possible to create an inventory and set reduction and compensation targets, based on three scopes:

• Scope 1: direct emissions (e.g. own vehicles, industrial processes);
• Scope 2: indirect emissions linked to electricity consumption;
• Scope 3: indirect emissions from the entire chain (suppliers, logistics, product use, etc.).

Why does this matter to companies?

According to Bain & Company's Consumer Pulse survey, 78% of the Brazilian population say they are more aware of the impacts of climate change, and more than half have already stopped consuming brands that don't demonstrate a commitment to environmental issues.

This scenario can be a point of attention, but also an opportunity. Companies that adopt emission reduction targets and demonstrate actions focused on sustainability tend to connect better with their audience, attract investors and position themselves in the face of new demands from society.

Making a commitment to Net Zero is a clear way of meeting this demand. It means reviewing processes, reducing emissions in a concrete way and working towards long-term goals in line with international guidelines. As well as responding to market expectations, this is a direct contribution to global efforts to limit global warming and ensure greater stability in the future.

How can companies achieve Net Zero?

Achieving Net Zero is a process that requires planning, structural changes and long-term commitment. Each sector has its own particularities, but the starting point is the same: understanding where emissions are and what can be done in practice to reduce them.

ClimatePartner, which helps companies reduce carbon emissions, recommends five steps:

1. Measure the corporate carbon footprint
   Important for companies to know the carbon emissions resulting from their business activities.
2. Measure the product carbon footprint
   Consider the entire life cycle of a product, from raw materials and manufacturing to transportation and final disposal.
3. Create a carbon reduction strategy
   Adopt renewable energies, use alternative raw materials or even subsidize public transport costs for your employees.
4. Compensate for carbon emissions
   Residual emissions that cannot be avoided must be offset through projects that follow recognized standards, such as the Gold Standard or the Verified Carbon Standard.
5. Communicate
   Communicate climate action targets and strategies to customers and stakeholders.

Net Zero and Neoenergia

Committed to the energy transition and the fight against climate change, Neoenergia has made progress on projects and targets aligned with Net Zero, with a focus on:

Renewable sources and decarbonization

The expansion of renewable sources is one of the pillars of Neoenergia's strategy to reduce emissions and drive the energy transition. The company invests in solutions that make the electricity matrix increasingly clean.

Energy Efficiency Actions

Through regulated programs and its own initiatives, Neoenergia promotes energy efficiency actions in various sectors of society. This includes modernizing equipment, encouraging conscious consumption and energy-saving projects in communities, schools and public institutions.

Sustainable mobility

Neoenergia invests in electric mobility solutions as part of its decarbonization strategy, adopting actions and initiatives in line with the company's purpose.