ONYINYECHI NWAIGBA 
Net zero has become one of the most common phrases in corporate sustainability. But beyond the pledges, what does it actually require from a business, and when can a company credibly say it is on the path to net zero?
For years, “net zero” sounded like language reserved for climate scientists, governments and international climate negotiations.
Today, it has become a boardroom conversation.
Banks are setting net-zero targets. Manufacturers are announcing decarbonisation plans. Energy companies are discussing transition strategies. Multinational corporations are making commitments to reduce their greenhouse gas emissions.
But there is a problem.
The phrase is becoming so common that it can be difficult to tell what companies actually mean when they say they are “going net zero”.
Does it mean planting trees?
Buying carbon credits?
Installing solar panels?
Reducing electricity consumption?
Switching company vehicles to cleaner fuels?
Or simply promising to eliminate emissions by 2050?
The answer is more complicated.
Net zero is not simply about cancelling out emissions with trees or carbon credits. For businesses, credible net-zero action begins with understanding where emissions come from, reducing them substantially and dealing transparently with the smaller amount that may remain.
The Science Based Targets initiative’s corporate framework, for example, expects companies pursuing science-based net-zero targets to make deep reductions across their value chains before neutralising residual emissions.
That distinction matters because a net-zero promise is only as credible as the pathway behind it.
First, What Does Net Zero Mean?
At its simplest, net zero means achieving a balance between greenhouse gases released into the atmosphere and greenhouse gases removed from the atmosphere.
But for businesses, the concept goes beyond simply calculating two numbers and making them equal.
ISO’s Net Zero Guidelines describe the pathway as reducing greenhouse gas emissions to the minimum possible level and balancing remaining emissions with removals, while emphasising transparent communication, credible claims and consistent reporting.
In practical terms, a company pursuing net zero should first ask:
How much are we emitting?
Where are those emissions coming from?
What can we reduce?
How quickly can we reduce it?
What emissions will remain after serious reduction efforts?
How will those residual emissions be addressed?
This makes net zero a business transformation exercise rather than a single environmental project.
Net Zero Is Not the Same as Carbon Neutrality
The terms are sometimes used interchangeably, but they should not automatically be treated as the same thing.
A company can purchase carbon credits or support projects that remove or avoid emissions while continuing to produce substantial emissions from its own operations.
That does not necessarily mean the company has fundamentally changed the way it operates.
Science-based net-zero frameworks place the emphasis on deep emissions reductions first, with neutralisation reserved for residual emissions that remain after substantial reductions have been achieved.
That is an important distinction for businesses trying to communicate their climate commitments.
Planting trees can be valuable.
Supporting renewable energy can be valuable.
Investing in carbon removal can be valuable.
But these activities should not become an excuse for avoiding reductions in the company’s own emissions.
Where Do a Company’s Emissions Come From?
Before a business can reduce emissions, it needs to understand its emissions footprint.
This is where the familiar Scope 1, Scope 2 and Scope 3 categories become important.
Scope 1: Direct Emissions
These are emissions that come directly from sources owned or controlled by the company.
For example:
- Fuel burned in company vehicles
- Company-owned generators
- Industrial boilers
- Manufacturing processes
- Other equipment that directly produces greenhouse gas emissions
For a Nigerian business that relies heavily on diesel generators, for example, Scope 1 emissions can be an important part of its footprint.
Scope 2: Purchased Energy
Scope 2 emissions are associated with the energy a company purchases, particularly electricity.
A company may not directly burn the fuel used to generate electricity, but its electricity consumption can still be associated with greenhouse gas emissions.
This means that improving energy efficiency, changing electricity sources and increasing renewable energy use can all become relevant to a company’s climate strategy.
Scope 3: The Bigger Challenge
Scope 3 covers indirect emissions across a company’s value chain.
This can include emissions associated with:
- Suppliers
- Purchased goods and services
- Transportation
- Business travel
- Employee commuting
- Product use
- Waste
- Distribution
- Investments and other value-chain activities
For many companies, Scope 3 can be significantly more difficult to measure and reduce because it involves activities outside their direct operational control.
This is also why a company cannot fully understand its climate impact simply by looking at the emissions from its offices or factories.
What Does Net Zero Look Like in Practice?
Imagine a Nigerian manufacturing company announces that it wants to reach net zero.
The first step should not be buying carbon credits.
It should be understanding the company’s current emissions.
How much diesel is being consumed?
How much electricity is being used?
How efficient are the company’s machines?
How much waste is generated?
Where do raw materials come from?
How are products transported?
What happens to products after customers use them?
Once the company understands the footprint, it can begin identifying areas where emissions can be reduced.
That might involve improving energy efficiency, investing in renewable energy, modernising equipment, changing logistics systems, reducing waste or working with suppliers to reduce their emissions.
The precise strategy will depend on the industry.
A bank will not have the same emissions profile as a cement manufacturer.
A telecommunications company will face different challenges from an agricultural business.
That is why credible climate targets need to reflect the realities of individual sectors and businesses.
Net Zero Requires Targets, Not Just Intentions
One of the biggest problems with corporate sustainability commitments is the difference between ambition and implementation.
A company can announce:
“We will become net zero by 2050.”
But that statement alone does not tell stakeholders how it plans to get there.
What happens in 2027?
What happens in 2030?
What emissions must be reduced by then?
Which parts of the business will be transformed?
How much money will be invested?
Who is responsible for delivering the plan?
How will progress be reported?
Science-based target frameworks are designed to create this kind of pathway.
SBTi distinguishes between near-term targets, which focus on emissions reductions over roughly the next five to ten years, and longer-term net-zero targets that establish the deeper reductions required over time.
That is why a credible net-zero strategy should not only have a distant 2050 ambition.
It should have milestones along the way.
What About Carbon Credits?
This is where many conversations about net zero become confusing.
Carbon credits can play a role in climate action, but they should not be treated as a substitute for reducing a company’s own emissions.
The basic principle is simple:
Reduce what you can. Then address what genuinely remains.
Under the SBTi’s existing net-zero framework, companies are expected to make deep emissions reductions before neutralising residual emissions. The framework describes neutralisation as addressing remaining emissions through permanent carbon removals.
This distinction also matters because poorly designed offsetting claims can create credibility problems.
A company cannot simply continue emitting at high levels and present itself as environmentally responsible because it has purchased enough credits to offset those emissions.
That is where accusations of greenwashing can emerge.
Why Should Businesses Care About Net Zero?
Net zero is obviously a climate issue.
But it is also increasingly a business issue.
Companies face physical climate risks.
Flooding can disrupt operations.
Extreme heat can affect workers and infrastructure.
Water stress can affect production.
Climate-related disruptions can affect supply chains and logistics.
There are also transition risks.
Regulations can change.
Customers can change their preferences.
Investors can demand better climate disclosures.
Financing conditions can increasingly take sustainability performance into account.
SBTi describes science-based climate action as a way for companies to manage transition risks and capture opportunities associated with the transition to a net-zero economy.
So the question is no longer simply:
“Is your company environmentally responsible?”
It is increasingly:
“Is your business prepared for the economy that is coming?”
Net Zero Can Also Create Business Opportunities
The transition does not have to be viewed only as a cost.
Energy efficiency can reduce operating expenses.
Renewable energy can reduce exposure to energy-price volatility.
Cleaner technologies can create new products and services.
More efficient logistics can reduce fuel consumption.
Sustainable supply chains can strengthen resilience.
Companies that understand these opportunities early may be better positioned as markets change.
ISO also identifies potential benefits of net-zero action for organisations, including energy efficiency, innovation, resilience and alignment with growing sustainability expectations.
For Nigerian businesses operating in an environment where energy costs and infrastructure challenges can significantly affect operations, some climate actions may therefore make economic sense even beyond their environmental benefits.
What About Small and Medium-Sized Businesses?
Net zero can sound like something only large corporations can afford.
That should not be the case.
A smaller business may not have the resources to immediately develop a sophisticated climate strategy.
But it can still begin.
It can track electricity and fuel consumption.
It can reduce unnecessary energy use.
It can improve waste management.
It can consider renewable energy where economically viable.
It can reduce unnecessary business travel.
It can examine how suppliers and logistics contribute to its footprint.
Most importantly, it can begin measuring.
The SBTi’s newly published Corporate Net-Zero Standard Version 2.0 includes differentiated approaches for different business contexts, including small and medium-sized enterprises and companies in lower-income countries. Target validation under the new version is scheduled to begin in 2027, while companies setting targets in 2026 are directed to the existing Version 1.3.1.
That development is particularly relevant for businesses operating in markets such as Nigeria.
The Nigerian Business Context Matters
Net zero cannot simply be copied from corporate sustainability strategies developed in Europe or North America.
Businesses in Nigeria operate within a different energy and infrastructure environment.
Many companies depend heavily on generators.
Electricity reliability remains a major operational consideration.
Transportation systems are different.
Access to renewable energy varies.
Supply chains can be more fragmented.
These realities affect the pathway businesses can realistically take.
But they do not eliminate the need for climate action.
Instead, they make context-specific transition planning even more important.
For a Nigerian company, the first major climate intervention may not be an expensive carbon-removal project.
It could be reducing diesel consumption.
It could be improving energy efficiency.
It could be installing solar power.
It could be redesigning logistics.
It could be reducing waste.
It could be working with suppliers to improve their environmental performance.
Net zero should therefore be understood as a journey of transformation rather than a single technology.
The Greenwashing Question
As more companies announce climate commitments, stakeholders will need to become better at distinguishing between credible action and attractive language.
A company saying it is “committed to net zero” is not enough.
Stakeholders should be asking:
What is the baseline?
What emissions are included?
What are the interim targets?
How much will emissions actually be reduced?
What role do carbon credits play?
How is progress being measured?
What happens if the company misses its targets?
These questions are not about attacking businesses.
They are about making sustainability commitments more meaningful.
ISO’s Net Zero Guidelines specifically emphasise transparent reporting and credible communication around emissions, reductions and removals.
So, What Does Net Zero Actually Mean for a Business?
It means the company has to look at the way it operates and ask a difficult question:
Can we continue doing business the same way and still reach the climate goals we have announced?
In most cases, the answer will be no.
Reaching net zero can require changes to energy systems, transportation, procurement, manufacturing, buildings, technology, supply chains and even business models.
That is why net zero belongs in the boardroom, not just the sustainability department.
The finance team needs to understand the investment requirements.
Operations needs to identify efficiency opportunities.
Procurement needs to consider suppliers.
HR may need to consider employee behaviour and commuting.
Risk teams need to assess climate exposure.
Communications teams need to ensure claims are accurate.
And leadership needs to remain accountable for the transition.
The Bottom Line
Net zero is not a slogan.
It is not simply planting trees.
It is not buying enough carbon credits to make emissions disappear on paper.
And it is certainly not a target date without a plan.
For businesses, credible net zero means measuring emissions, setting science-informed targets, reducing emissions deeply across the value chain, addressing residual emissions appropriately and transparently reporting progress.
The journey will look different for a bank, a manufacturer, a telecommunications company, an agricultural business or a logistics company.
But the principle remains the same.
The real question is not:
“Has your company announced a net-zero target?”
It is:
“What is your company changing today to make that target possible?”
Because the credibility of a net-zero promise will ultimately be measured not by the ambition of the headline, but by the emissions reductions that happen after the announcement.
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