“Net-zero emissions” refers to the practice in which companies – or countries – balance the amount of greenhouse gas produced and the amount removed from the atmosphere. Entities are able to achieve “net-zero” emissions status by reducing the amount of GHG emissions released through efficiency and clean energy initiatives, and then “offsets the rest by removing carbon dioxide from the atmosphere or eliminating emissions elsewhere.”

One common way for net-zero pledging companies to off-set their emissions by relying on “carbon credits.” By way of individual carbon offsets, companies and other entities can acquire what represents one ton of carbon dioxide that has been removed from the atmosphere by a third-party organization, including those focused on agriculture or forestry, for instance, or other initiatives that reduce emissions. Purchasing carbon credits offers companies a permit to offset the equivalent amount of carbon produced in their production and manufacturing process to balance out their carbon footprint and claim “net-zero emissions.” Carbon credits are a sought-after market. In addition to fashion brands using them to meet their climate-change goals, they aid in biodiversity protection and pollution prevention efforts, as well as in financing climate-action projects.

Brands Pledging to Reduce Emissions

An array of companies are introducing net-zero emissions pledges as part of ESG initiatives. For example, in 2019, Kering created the “Fashion Pact” signed by 32 leading brands that pledge to stop global warming “by creating and deploying an action plan for achieving the objective of zero greenhouse gas emissions by 2050.” Brands that have signed on to the pact include: adidas, Burberry, Chanel, Gap Inc., H&M, Hermès, Nike, and Puma, among others.

In a similar vein, Amazon has launched its Climate Pledge with plans to reach net-zero emissions by 2040. Over 200 notable companies have joined the pledge, including ASOS, Holt Renfrew, Selfridges, Klarna, Deloitte, PepsiCo, Unilever, Brooks Running, and Proctor & Gamble.