Glossary
Net Zero describes a state in which a company reduces its greenhouse gas emissions by at least 90–95% and offsets only the unavoidable residual emissions through recognized mitigation measures (e.g., carbon capture or nature-based sinks). The key difference from “carbon neutrality” is that Net Zero cannot be achieved through offsetting alone. Instead, it requires deep decarbonization across all scopes: from direct emissions (Scope 1) to energy (Scope 2) and the value chain (Scope 3).
Many companies have long underestimated the difference: While “climate neutrality” often simply meant offsetting emissions through carbon credits, “net zero” is now regarded as a scientifically grounded approach to transformation —anchored in the SBTi Corporate Net-Zero Standard. This standard requires not only technical measures such as renewable energy or electrification, but also structural changes in products, supply chains, and business models.
Common misconceptions about net zero:
Anyone who confuses net zero with simple carbon neutrality runs the risk of facing accusations of greenwashing, being excluded from supply chains, or failing to manage rising CO₂ costs.
In the DACH region, net-zero is increasingly becoming a prerequisite for market access and financing. Investors and banks are reviewing climate targets as a condition for providing capital. Major customers are requiring suppliers to present valid net-zero roadmaps in order to meet their own commitments. Regulation is intensifying the pressure: the EU Green Deal, the CSRD, and national climate laws set clear decarbonization requirements. At the same time, the price of CO₂ is rising in Europe—forecasts predict €80–100 per ton by 2030 —making emissions a massive cost factor.
The pressure is mounting from all sides:
This means that net zero is no longer a voluntary CSR initiative, but is evolving into a “license to operate.” Companies that establish their baseline, validate their targets, and implement reduction pathways now will secure a competitive advantage—and avoid having to finance costly ad hoc measures under acute pressure to act in just a few years. In response, more and more companies are adopting a science-based target architecture —mostly within the framework of the SBTi Corporate Net Zero Standard —the internationally recognized framework for science-based climate targets.
The concept of "net zero" has long been a clearly defined set of goals established by international standards and scientific guidelines.
The UN Global Compact and the UN Race to Zero require companies to set short-term, science-based targets and disclose them transparently. This ensures that decarbonization plans are not merely announced but are subject to measurable verification. The Carbon Trust has also emphasized early on that net-zero is only credible if companies have reduced 90–95% of their emissions by 2050 at the latest—offsetting may only be used for unavoidable residual emissions.
The issue is also gaining regulatory traction: The EFRAG drafts on the ESRS (2025) require companies to explicitly align their decarbonization pathways with climate targets and document consistent transition plans. This makes net zero a mandatory requirement in CSRD reporting as well. At the national level, the Federal Environment Agency and, by extension, Germany, its own climate target of reducing domestic greenhouse gas emissions by at least 95% by 2045 to achieve the net-zero goal. For companies, this means that strategies must align not only with global but also with nationally binding climate pathways.
For companies, this means that those who rely solely on voluntary targets risk falling behind in terms of both regulation and reputation. Net-zero strategies are no longer optional— they are essential for operating within sustainable supply chains.
The SBTi Net Zero Standard is currently the world’s most important benchmark. It stipulates that companies must reduce at least 90–95% of their emissions by 2050 at the latest; only the small remainder may be offset.
Companies define near-term targets (typically 5–10 years) in line with the 1.5 °C pathway and long-term targets by 2050 at the latest, with clear criteria for permissible residual emissions and their neutralization. The key principle is“reduce first, then neutralize”: Net Zero cannot be “bought” through offsetting, but requires substantial decarbonization across all scopes.
In practical terms, this means that by around 2030, companies must be demonstrably on track to meet the 1.5 °C target (near-term). This generally results in an absolute reduction of around 42–50% across all scopes, for which energy efficiency, electrification, and 100% renewable electricity (e.g., PPAs) are key in Scopes 1 and 2, and robust supplier programs are key in Scope 3. The long-term goal by 2050 (often sooner) requires a ≥ 90% reduction in emissions—only the unavoidable remainder may be offset through scientifically recognized neutralization approaches (e.g., technological CO₂ removal or nature-based sinks).
Verifiability is key: targets and pathways must be revalidated with the SBTi at least every five years. This ensures that the level of ambition and the pace of implementation remain aligned with climate science —a factor that buyers, banks, auditors, and ESG rating agencies are increasingly focusing on. For medium-sized companies in the DACH region, this means: Without data quality (Scope 3 methodology, primary data), governance (roles, KPIs, carbon budgets), and actionable roadmaps (CAPEX/OPEX pathways), no validation will stand the test of time.
The transition to net zero is no longer just a topic for “early adopters”; it is becoming a business imperative. The pressure is coming from three directions at once:
Investors now expect robust climate targets as the basis for capital decisions. A survey by the UN Global Compact shows that over 70% of institutional investors cite decarbonization strategies as a key criterion for investments. At the same time, major buyers—from automotive groups to food manufacturers—are demanding valid net-zero plans from their suppliers. Add to that the political landscape: With the CSRD and national climate laws, net-zero is effectively becoming mandatory.
Data from the Science Based Targets initiative (SBTi) and the annually published SBTi Trend Tracker (data range: Jan. 2024–Jun. 2025) show how companies are rapidly moving from mere declarations of intent to validated, science-based targets. By mid-2025, SBTi data shows nearly 11,000 companies with validated targets or active commitments. However, the shift within this total is crucial: Compared to the end of 2023, the number of companies with validated near-term targets rose by 97%, while companies with near-term + net-zero targets increased by as much as 227%. At the same time, the segment of pure commitments remained virtually unchanged. This underscores two things:
A closer look at the sectors reveals clear patterns: SBTi data shows that certain sectors are particularly dominant when it comes to adopting science-based targets. The three leading sectors— industrial, consumer goods, and materials —together account for over 70% of validated targets. Industrial companies (machinery and equipment manufacturers) lead with about 33%, followed by consumer goods manufacturers (~22%) and materials producers (~18%) (SBTi Trend Tracker 2025).
For Europe, the tracker paints a mixed picture: With over 4,000 companies, the region leads in absolute terms, but relative growth has slowed. While Asia and Latin America are catching up rapidly, Europe’s challenge lies in translating existing commitments into measurable progress. For German companies in the mechanical engineering and chemical sectors in particular, this means that net-zero targets are no longer just a “nice-to-have,” but rather a ticket to international markets and tenders.
For German companies, this means that competitive pressure is increasingly shifting from simply setting goals to actual implementation and validation. Those who rely on existing commitments without demonstrating tangible progress risk losing market share and credibility—precisely because international competitors are scaling up faster.
When it comes to procurement, financing, and credit ratings, the quality of targets is becoming more important than mere participation. Companies that consistently decarbonize Scope 1 and 2 emissions in the short term (5–10 years), measurably address Scope 3 emissions, and present a net-zero pathway by 2050 at the latest will improve their access to investors, tenders, and partnerships. In practice, we see that supply chain requirements increasingly demand validated near-term targets (and, more and more often, net-zero targets). Those who continue to rely on “commitments” risk opportunity costs: higher CO₂ prices, worse terms, and missed deals. In short: The Trend Tracker confirms an accelerating momentum —away from announcements and toward verifiable target architectures.
The economic outlook is also clear: With CO₂ prices of €80–100 per ton by 2030, even medium-sized companies will face additional costs in the six- to seven-figure range per year. Net zero is therefore no longer just an “ESG bonus,” but a key factor for competitiveness and sustainability.
Note: The bars show the total absolute figure for each year; the percentages within the bars represent the share of each category. In 2023, for example, ~40% of the total consisted of commitments, 52% of validated near-term targets, and 8% of near-term + net-zero targets. In 2025 YTD, the proportions have shifted significantly: 24% / 58% / 18%.
What does this mean in practice? To avoid misunderstandings, it’s worth taking a look at the relevant standards and regulations.
The net-zero journey is not a linear project, but rather a path of transformation with clear milestones leading up to 2050 at the latest. To this end, companies should establish their GHG baseline (Scopes 1–3) by 2025/2026, prioritize hotspots, and set up internal governance—including data processes, responsibilities, and initial capital expenditure planning.
The first step is establishing a baseline: a comprehensive greenhouse gas inventory covering Scopes 1–3. This provides transparency regarding where the largest emissions originate and enables the prioritization of measures. Based on this, reduction potentials are identified —ranging from energy efficiency measures and electrification to collaboration with suppliers. Subsequently, scientifically sound targets are formulated that are clearly measurable in the short term (5–10 years) and long term (by 2050).
The near-term phase through ~2030 marks the decisive push: Companies must demonstrate that they are on a 1.5 °C-compatible reduction trajectory. This typically entails an absolute reduction of approximately 42–50% in total emissions across all scopes. For Scopes 1 and 2, the focus is on energy efficiency, electrification, 100% renewable electricity, and PPAs. For Scope 3, supply chain programs are essential to engage suppliers and achieve the first substantial reductions. These targets must be science-based and verifiable (SBTi-compliant), as procurement teams, banks, and auditors pay close attention to this.
Between 2030 and 2035/2040, the focus will shift from quick efficiency gains to structural changes in processes, products, and value creation: alternative materials, circular models, design-for-use phases, logistics, and portfolio management. The quality of Scope 3 data and the effectiveness of supplier programs will be decisive factors in achieving these goals. At the same time, the relevance of transformation financing (green loans, sustainability-linked instruments) and the integration of climate risks into Capex gateways is increasing.
By 2050 (or sooner), the absolute reduction across all scopes must be at least 90%, leaving only unavoidable residual emissions. These are addressed through carbon neutralization (e.g., CCS/CCUS, nature-based sinks), while beyond-value-chain mitigation amplifies the impact beyond the company’s own value chain.
Important: Every five years, targets and pathways must be revalidated against the current state of climate science (SBTi criteria). This ensures that the level of ambition remains aligned with new findings and regulatory developments. Companies that consistently plan for and finance these milestones reduce structural costs (CO₂, energy), secure market access, and increase their resilience to regulation and supply chain requirements.
Implementing this transition to net zero is certainly challenging—both financially and organizationally. Companies must weigh CAPEX investments (e.g., in solar panels, heat pumps, or the electrification of their vehicle fleets) against OPEX costs (ongoing operations, maintenance, and certificates).
Ein Beispiel: Ein mittelständisches Produktionsunternehmen emittiert 5.000 t CO₂ jährlich. Bei einem angenommenen CO₂-Preis von 80 €/t (EU ETS-Projektion 2030) ergeben sich potenzielle Zusatzkosten von 400.000 € pro Jahr. Eine Investition in ein eigenes Solardach mit 1,2 Mio. € CAPEX und 50.000 € OPEX p.a. könnte die Emissionen um 60 % senken – das entspricht einer CO₂-Kostenersparnis von 240.000 €/a. Die Amortisationszeit verkürzt sich damit von >10 auf <5 Jahre.
The following calculator allows you to compare CAPEX, OPEX, and CO₂ prices in order to assess the cost-effectiveness of individual measures:
Important: In addition to investments, Scope 3 emissions are the biggest hurdle. They often account for over 90% of total emissions and require collaboration with suppliers and customers. Added to this are challenges related to data collection, financing large-scale transformation projects, and governance structures. Here, market-leading companies—such as our partner TeamViewer—demonstrate the steps necessary for a successful net-zero strategy.
The globally active technology company TeamViewer provides a practical example: Years ago, the company produced its first comprehensive GHG inventory (Scopes 1–3) and, based on that, developed SBTi-compliant targets, including a reduction roadmap. Lessons learned from the TeamViewer case study:
• Governance was key: Without clear responsibilities and management processes, measures were significantly delayed.
• Data quality was a stumbling block: Inconsistent supplier data was a time-consuming issue—a key focus before implementation.
Read our TeamViewer case study to learn more about how TeamViewer is achieving its net-zero goals with the support of Five Glaciers Consulting.
The requirements for net-zero are becoming increasingly stringent:
👉 Companies should get started early to ensure they are prepared for regulatory and market changes.
Whether it’s a net-zero roadmap, SBTi target validation, or action planning —Five Glaciers provides companies with pragmatic and in-depth support.
👉 Services: Climate Targeting
👉 Background: SBTi Net Zero Blog
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