The trouble with ‘carbon neutral’ — and what comes next

What does it mean to be “carbon neutral”? Is the term past its expiration date?

In the latest episode of Two Steps Forward, sustainability communications consultant Solitaire Townsend and I dive deep into the messy, confusing and often misleading world of corporate carbon claims.

Also in this episode, Soli and I preview Solutions House at this month’s Climate Week NYC.

“Carbon neutral” once carried a certain promise. When Interface, the carpet company, popularized the phrase two decades ago, it felt like a step forward — an early signal that business could take responsibility for its role in the climate crisis. But as Soli and I explore, the term has since morphed into a hall pass for greenwashing, a way for some companies to buy absolution without changing much.

In an age of heightened scrutiny, companies are no longer able to pay for offsets while continuing business as usual. Apple, for example, was recently penalized by a German court for overstating “CO₂ neutral” claims on its Apple Watch, highlighting the legal risks of vague promises. As my colleague Jim Giles reported last week, the ruling probably marks the death knell for carbon neutral as a valid claim.

Carbon neutrality wasn’t always a scam. In its day, it pushed companies to measure their emissions — a radical idea in the early 2000s. Offsets helped funnel billions into conservation, often benefiting Indigenous and local communities. The problem is that what was once a useful bridge has become a crutch. Eliminating the label entirely could inadvertently cut off that capital flow. The challenge is to avoid misuse without starving nature-based solutions of much-needed financial resources.

The three ‘R’s’ of energy

The problems with carbon neutral have in part to do with companies to go with the path of least resistance, even if the least impactful. There’s a parallel with the “three Rs” of waste—reduce, reuse, recycle—which represent a hierarchy of action. Companies (and all of us) often skip right to “recycle” without first going through “reduce” and “reuse” because it’s often simpler and less expensive (or free).

When it comes to carbon emissions, the parallel formulation is “efficiency, renewables and offsets” — that is, use the least amount of energy to get the job done, use the highest percentage of renewables, then offset the balance. Similarly, companies (and all of us) often go right to “offsets,” skipping past the first two parts of the hierarchy.

Do consumers even care?

Do shoppers care about these terms? Soli noted that women, particularly younger women, are more responsive to sustainability claims, especially in categories like food, beauty, and household goods. Still, sustainability is rarely the top decision driver—it works more as a brand differentiator in crowded markets. Misusing claims, however, risks undermining consumer trust altogether.

But much of the action doesn’t show up in products, or at least from the consumers’ perspective. A great deal of a product’s emissions can originate deep in the supply chain, sometimes three or more vendors away from the branded consumer product. A consumer-facing company is likely hardpressed to claim that its suppliers have made significant emissions reductions.

Looking ahead, we believe “carbon neutral” is on the way out, through no compelling replacement has emerged. “Net zero” may be technically accurate but fails to resonate. New phrases —some confusing, such as “climate positive” and “carbon negative” — are being used, but none has yet gained significant traction.

The Two Steps Forward podcast is available on Spotify, Apple Podcasts, YouTube and other platforms — and, of course, via Trellis. Episodes publish every other Tuesday.