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Definition

Carbon Neutrality

Carbon neutrality means measuring greenhouse gas emissions for a stated product, service or organisation and year, reducing them where possible, then counterbalancing the remainder with verified carbon credits.

What does a carbon-neutral claim mean?

Carbon neutrality is a claim about a defined product, service or organisation. ISO 14068-1:2023 says to quantify its footprint, reduce emissions and offset the remainder. Offsetting uses carbon credits to counterbalance remaining emissions.

Why are carbon-neutral claims scrutinised?

Salesforce's Sustainability Exhibit makes the claim contractual for covered suppliers. Section 2.1.2 requires carbon-neutral products or services and supporting documents when asked.

The Australian Competition and Consumer Commission (ACCC) asks for the baseline, inclusions, exclusions, reductions versus offsets, and records showing the same credit was not claimed twice. The UK Competition and Markets Authority (CMA) asks businesses to explain reductions and use an offset scheme that can be verified.

From 27 September 2026, EU member states must apply a specific ban. A product cannot claim a neutral, reduced or positive greenhouse gas impact when the claim relies on offsets outside its value chain. See Directive (EU) 2024/825, Annex I point 4c.

How does carbon neutrality work?

Name the subject, claim year and what the calculation covers. Record the method, footprint before credits and reductions made. Accept only credits from a verifiable offset scheme, with unique credit numbers and registry records showing the same credit was not claimed twice. For each cancelled credit, keep the registry entry showing the project, project year, quantity, cancellation date, named beneficiary and claim period. CDP, an environmental disclosure platform, asks in 2026 Questions 7.79 and 7.79.1 for cancelled project-based credits and their details.

What mistakes should you avoid?

  • Using credits that were not verified or cancelled.
  • Claiming the whole product is neutral after measuring one site or stage.
  • Omitting the claim year or reusing old data.
  • Calling a carbon-neutral product net zero.

How is carbon neutrality different from net zero?

Carbon neutrality can cover one subject and period, with credits balancing the remainder. For 2026 target validation, the Science Based Targets initiative (SBTi) uses Corporate Net-Zero Standard Version 1.3.1. A company must first meet its long-term reduction target. It then neutralises remaining emissions by removing carbon and storing it.

Is carbon neutrality mandatory?

Not generally. It becomes contractual when your agreement says so, as in Salesforce's Exhibit. Consumer law still applies to voluntary marketing claims.

Example

Hypothetical scenario: A customer asks a courier, "Were the express deliveries you provided to us in 2026 carbon neutral?" The courier defines the subject as those customer deliveries in calendar year 2026, not its whole company. Its measured footprint is 36.4 metric tonnes CO2e. Documented route and fuel changes reduce 6.4 tonnes, leaving 30.0 tonnes. It cancels 30 credits of 1 metric tonne CO2e each for that claim period and keeps the registry records. The claim balance is 36.4 - 6.4 - 30.0 = 0 metric tonnes CO2e; the gross footprint remains 36.4 and is not rewritten as zero. If the calculation excludes subcontracted transport or packaging, it discloses the gap and does not make the claim.

Where it comes up

Salesforce products and services provided on a Carbon Neutral BasisSalesforce Sustainability Exhibit, definition and section 2.1.2CDP project-based carbon credits cancelled in the reporting periodCDP 2026 Questions 7.79 and 7.79.1ACCC guidance for Carbon Neutral, Climate Neutral and Net-zero claimsMaking environmental claims, emissions-related claims, pages 26-27Official sourceCMA carbon-neutrality disclosure and objectively verifiable offset schemesMaking environmental claims on goods and services, material information guidanceOfficial sourceEU prohibition of offset-based neutral product claimsDirective (EU) 2024/825, Annex I point 4c; applies from 27 September 2026Official source

Related terms

Net-Zero

Under the SBTi Corporate Net-Zero Standard, net zero means deeply cutting greenhouse gas emissions across a company's value chain, then permanently neutralising the small amount that remains.

Carbon Credit

A carbon credit is a tradeable unit representing one metric tonne of carbon dioxide equivalent reduced or removed by a project, recorded in a registry and retired when used for a claim.

Carbon Accounting

Carbon accounting is the process of defining a company’s greenhouse gas inventory, collecting activity data, applying emission factors, and reporting Scope 1, Scope 2, and Scope 3 emissions on a consistent basis.

Greenwashing

Greenwashing is a false or misleading environmental message that makes a product, service, investment, or business appear more beneficial or less harmful to the environment than the evidence supports.

ISO 14068-1

ISO 14068-1:2023 gives organisations and products a documented process for making carbon-neutrality claims, covering the subject boundary, footprint, reduction plan, offsetting, report, and claim.

Sources

Sources checked 2026-08-18

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Carbon Neutrality Definition | Keslio