Carbon-neutral company: Meaning and examples in the UK

Paul Collins

By Paul Collins

Journalist and digital marketing professional

Updated on
min reading
carbon neutral company

Climate change is one of the key issues facing us now and in the future. With natural disasters such as flooding, hurricanes, and drought becoming more frequent, a collective effort needs to be made to reduce carbon dioxide (CO2) emissions. Businesses have a big role to play in leading the change, and in this article, we’ll look at the definition of a carbon neutral company, as well as examples of businesses in the UK making a difference.

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What is carbon neutral?

We have known for a long time that companies, large and small, emit carbon emissions into the atmosphere at some or all stages of their manufacturing, production or operational processes. Being carbon neutral, according to the certification body, Carbon Neutral, is when a company calculates its carbon footprint and takes measures to reduce emissions via a combination of in-house measures and investing in carbon offsetting projects locally or internationally - such as reforestation initiatives.

Carbon neutral vs carbon freeThe increase in awareness of climate change has given rise to various terms becoming common in the public sphere which are important to differentiate. Carbon neutral, as mentioned, is when efforts are made to offset and reduce carbon emissions. Carbon free, or zero carbon, is when no emissions are released at any point in the manufacturing or production process.

In the UK, as in many countries across the world, companies are having to alter the way they carry out their business to ensure they actively reduce their emissions. As a way of educating employees and encouraging them to also make a difference, environmental and climate initiatives are often incorporated into a company’s corporate social responsibility (CSR) policies.

Advantages of being a carbon neutral company

Putting climate change solutions and sustainable business practises not only helps the environment but can also help a company grow in terms of customers and sales. A Yougov poll carried out in 2019 found that more than two-thirds (67%) of consumers were more likely to buy a product or service from a company taking climate change seriously. That research was further backed up by Nielsen, which found that 66% of consumers would be happy to pay more for products from an environmentally-friendly company. For perhaps the most environmentally-aware demographic, Millennials and GenX, that figure increases to almost two thirds (73%).

So what are the benefits to becoming a carbon neutral company and what does a business need to do to become one? Some of the advantages include:

carbon neutral advantages
  • Increased revenue: Taking the lead on climate means a business can differentiate themselves from their direct competitors and use it as a key selling point. Research shows consumers are willing to pay more for products and services from sustainable businesses;
  • Better staff retention and improved motivation: As people become more conscious of climate change, they understand the need to play their part too. According to consultancy group Global Tolerance, 42% of UK workers want to work for an organisation that takes the environment seriously. In addition, almost half (44%) of 2,000 people surveyed said they meaningful work that helped others was more important to them than having a higher salary, and just over a third of respondents (36%) claimed they would be more motivated if they knew the company they worked for was leading the way in climate change action;
  • Avoid tax penalties: Governments are looking at ways to punish the biggest polluters and those that do not contribute towards the collective efforts to address climate concerns. Eventually, businesses across the nation will be bound by legislation, so it is probably wise to stay ahead of the game and put sustainable practice at the heart of business now.

How to become a carbon neutral company?

Companies have a number of ways to become carbon neutral, normally via a combination of internal efforts to reduce waste, recycle, and improve processing and manufacturing practises, as well as investing in carbon offsetting projects.

There are a number of organisations in the UK, such as the Carbon Trust, or Carbon Britain, that award carbon neutral certifications for meeting the requirements set out by the international specification on carbon neutrality, known as PAS2060. These organisations assess the efforts carried out by companies to reduce emissions. If they meet the requirements, companies or products can be certified as carbon-neutral, which can have a number of benefits to the organisation, such as improved sales.

Carbon neutral companies in the UK: Examples

Many businesses across the UK are making efforts to reduce their emissions and help the UK reach its climate targets of being carbon neutral by 2050, as set out at COP26 in November 2021. In this section, we’ll look at some examples of carbon-neutral companies in the country and how they have achieved that status.

carbon-neutral business examples
  • SKY: The media organisation has been certified as carbon neutral since 2006. Key to reducing emissions in that time has been a reduction in travel, waste, and water use. In addition, the group has taken part in various initiatives with partner organisations. In 2009, it teamed up with WWF to launch the Sky Rainforest Rescue, a project aimed at highlighting the problem of deforestation and providing aid to farmers in the Acre region of Brazil and stopping them destroying the Amazon rainforest. Since then, SKY has also launched projects to tackle the issue of plastic in our oceans and invested more than £25 million into environmental initiatives;
  • Avis: The emergence of the electric and hybrid cars has altered the car market and seen the sector move in a more environmentally-friendly direction. Car-hire company, Avis, has introduced eco-friendly cars to its fleet in recent years and will continue to add more. It has also been involved in various carbon-offsetting projects, including the development of renewable energy, methane capture schemes, and tree planting. To date, it has offset more than 200,000 tonnes of CO2, the equivalent of 489 million miles driven by an average passenger vehicle;
  • Marks & Spencer: Retail giant M&S has been carbon neutral since 2007 and by 2035 aims to have cut its emissions by 90%. To achieve this they improved fuel efficiency of their fleet of vehicles, and took company-wide measures to reduce waste and increase recycling. By 2025, the company aims to have removed all plastic packaging from its products.

It is not just large companies and organisations in the UK making efforts to cut emissions and become carbon neutral businesses. Medium sized companies as well as start-ups are also doing their part, for example:

  • Chilly’s: The main aim of the company is to reduce the amount of single-use plastic bottles in the UK, which is why it has designed a stainless-steel bottle. In addition to that, it has invested in various projects, including £200,000 on the Refill Project, which aims to make free drinking water available on every high street across the country by 2025;
  • Innocent: The drinks company is already pushing for customers to opt for a healthier diet and lifestyle, but is also involved in different projects to reduce emissions and save the environment. Examples of this include using only plant-based or recycled materials for all its packaging, using lower carbon transport, such as trains and barges to distribute its products, and using 100% renewable electricity and biogas at its head office.

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Carbon-negative companies: What are they?

While many businesses in the UK have committed to being carbon neutral by 2050, some companies are going one step further and aiming to be carbon negative.

What does carbon negative mean?Carbon negative means companies remove CO₂ from the atmosphere, or sequester more CO₂ than is emitted - usually via the use of solar panels or wind power. Any excess energy stored can be sold back to the National Grid to help reduce emissions elsewhere.

Tech giant Microsoft, and leaders in flat-pack furniture, Ikea, are two organisations aiming to be carbon negative by 2030. To do so they are planning a number of things including switching to 100% renewable energy, getting zero-carbon certifications, and installing on-site solar panels.

Read more in our business section about what more companies can do to help with climate change.