ICAEW.com works better with JavaScript enabled.

Net-zero: can you tell your LCA from your carbon footprint?

Author: ICAEW Insights

Published: 23 Jun 2021

Reducing and measuring climate impacts involves getting to grips with new terms and methodology. We look at common, related terms and what they actually mean.

The road to net zero is dotted with signposts that will make little sense without prior knowledge. From assessing climate impacts to making emission reduction plans, it is a complicated and nuanced process. The terminology that you will come across relates to guidelines and resources that can help you navigate the process, but they will make little meaningful difference if you do not understand what they refer to and the part they play in achieving net-zero emissions. 

ICAEW has created a full glossary of terms with its offset partner ClimatePartner. Here’s a selection of common, related terms to help you get started. And in case you didn’t know:

Net zero

Net zero refers to a state in which the greenhouse gases emitted into the atmosphere are balanced by the equivalent amount of greenhouse gas removals. The aim is to have a long-term plan to reduce emissions as close to zero as possible and to remove the residual emissions. As defined by the Science Based Targets Initiative, Net Zero means: 

Achieving a state in which the activities within the value chain of a company result in no net impact on the climate from greenhouse gas emissions. This is achieved by reducing value chain greenhouse gas emissions, in line with 1.5°C pathways, and by balancing the impact of any remaining greenhouse gas emissions with a proper amount of carbon removals.” _

Life cycle assessment (LCA) vs carbon footprint

The difference between an LCA and a Carbon footprint relates to the impact categories studied. A Carbon Footprint is focused on one environmental impact category: greenhouse gas emissions (CO2). Meanwhile an LCA can take more impact categories into account, such as land use, water use and ocean acidification. Carbon footprint analysis is a subset of a complete life cycle assessment of a product, activity, or process. The International Organization for Standardization provides guidelines and requirements for conducting a Life Cycle Assessment according to ISO 14040 and 14044.

Greenhouse gas protocol vs scope emissions

The GHG protocol is an internationally recognized standard for the accounting of corporate emissions. It was developed by the world resources institute (WRI) and the world business council for sustainable development (WBCSD). There are five basic principles to follow when preparing a corporate carbon footprint: 

  • Relevance: all material sources of emissions must be considered when preparing a carbon footprint for a company and that the report should be useful for decision-making both inside and outside the company. 
  • Completeness: all relevant emission sources within the system boundaries must be considered. 
  • Consistency: to enable comparability of results over time, the accounting methodologies and system boundaries should be recorded and maintained in subsequent years. Potential changes in methodology and system boundaries must be identified and justified. 
  • Accuracy: bias and uncertainty should be reduced as much as possible so that the results provide a sound basis for decision-making. 
  • Transparency: results should be presented in a transparent and understandable manner. 

Carbon emissions are broken down into three categories by the Greenhouse Gas Protocol to better understand the source, which is where scope comes in: 

Scope 1 – All Direct Emissions from the activities of an organisation or under their control. Including fuel combustion on site such as gas boilers, fleet vehicles and air-conditioning leaks. 

Scope 2 – Indirect Emissions from electricity bought and used by the organisation. Emissions are created during the production of the energy and eventually used by the organisation. 

Scope 3 – All Other Indirect Emissions from activities of the organisation, occurring from sources that they do not own or control. These are usually the greatest share of the carbon footprint, covering emissions associated with business travel, procurement, waste and water.

Product carbon footprint vs embodied carbon

These are inherently linked. A Product Carbon Footprint (PCF) is the most established method for determining the climate impact of a product. Throughout the entire life cycle of a product - from raw material extraction to recycling or disposal. Climate-relevant impacts arise in the form of greenhouse gas emissions. The Product Carbon Footprint helps to identify, analyse and, with the right measures, reduce or (ideally) completely avoid these impacts. Embodied carbon is the carbon emissions emitted in the creation of any product or service over its entire lifetime.

Carbon removal vs carbon offset

Carbon dioxide removal (CDR), also known as greenhouse gas removal, is a process in which CO2 is removed from the atmosphere and sequestered for long periods of time. CDR methods include afforestation, agricultural practices that sequester carbon in soils, bioenergy with carbon capture and storage, ocean fertilization, enhanced weathering, and direct air capture when combined with storage. A carbon offset broadly refers to a reduction in GHG emissions – or an increase in carbon storage (eg, through land restoration or the planting of trees) – that is used to compensate for emissions that occur elsewhere. Carbon offsets avoid, reduce or remove carbon from the atmosphere. 

Carbon neutral vs climate neutral 

A carbon neutral business, product or service can be achieved when the totality of greenhouse gas emissions (CO2e) emitted are offset by verified carbon offset projects. In some cases, Carbon Neutral has been used to only refer to carbon dioxide, whereas Climate Neutral makes the inclusion of all greenhouse gas emissions – such as carbon dioxide (CO2), Methane (CH4), Nitrous oxide(N2O), Hydrofluorocarbons (HFCs) and Perfluorocarbons (PFCs) – clear.