What’s the difference between carbon negative and carbon neutral?

This article has been updated.

It’s getting hard to read the news without coming across a company promising to “reach net zero” or go “carbon neutral” or even become “carbon negative.”

And, so far, around 145 governments have announced or are considering net zero and carbon neutrality targets, covering nearly 90% of global emissions. But what is the difference between carbon neutrality and carbon negativity, and why does this distinction matter for businesses and governments striving for climate action?

Here's a guide to the different pledges and how to compare them.

Net zero: Net zero means that any carbon dioxide released into the atmosphere from the company’s activities is balanced by an equivalent amount being removed.

Carbon neutral: Carbon neutral is slightly different, allowing companies to measure the amount of carbon they release and offset that with a reduction in emissions or a removal of carbon. This can include buying carbon credits to make up the difference, making it appealing to companies that produce a lot of emissions.

Carbon negative: The next step – becoming carbon negative – requires a company to remove more carbon dioxide from the atmosphere than it emits.

Global warming and other environmental concerns are rising up business' agendas, in the face of stark environmental data. The United Nations says climate change is the defining issue of our time and without drastic action, adapting to the changes it will bring will be difficult and costly.

Companies are in the spotlight since studies show they’re responsible for the lion’s share of greenhouse gas emissions, creating a blanket of gas that traps heat and raises Earth’s temperature.

Some businesses have been accused of “greenwashing” – overstating their eco credentials to garner favourable publicity – or setting headline-grabbing goals that look too far in the future and aren’t measurable.

But for many companies, the narratives have changed, acknowledging the need to find long-term solutions that create real impact.

Companies aiming for carbon negativity are adopting ambitious strategies that go beyond traditional carbon neutrality efforts. These approaches focus on not only reducing emissions but actively removing more carbon dioxide from the atmosphere than the company emits.

Key strategies include:

By implementing these strategies, businesses are not only addressing financial and reputational risks associated with carbon-intensive products but also positioning themselves as leaders in the transition to a zero-carbon future.

The World Economic Forum’s Equitable Transition Initiative brings together a global coalition to shape an equitable green transition through the development of actionable tools, principles and business strategies.