Carbon neutral vs net zero: what the claims mean and how to spot greenwashing
A neutral guide to carbon neutral, net zero and climate positive claims, the standards behind them (ISO 14068, SBTi, UN HLEG) and India's 2024 greenwashing guidelines.
What do rules elsewhere say, and why does that matter for Indian companies?
Indian exporters and brands that sell to consumers abroad also face foreign rules. The European Union's Directive (EU) 2024/825 on empowering consumers for the green transition amends EU consumer law. According to the European Commission, member states had to bring it into national law by 27 March 2026, and its rules apply from 27 September 2026. It restricts generic environmental claims without recognised proof, bans sustainability labels that are not based on a certification scheme or set by public authorities, and targets claims that a product has a neutral, reduced or positive climate impact because of offsetting.
For an Indian company selling packaged goods, garments or electronics to EU shoppers, a "carbon neutral product" label based on credits may therefore no longer be allowed on those products.
Sources: IPCC AR6 Working Group III, Annex I: Glossary (2022); IPCC AR6 Working Group III, Summary for Policymakers (2022); UNFCCC, Paris Agreement (2015); ISO 14068-1:2023 Climate change management: Transition to net zero, Part 1: Carbon neutrality (catalogue page); BSI, PAS 2060 and ISO 14068-1 carbon neutrality; SBTi, The Corporate Net-Zero Standard (web page); SBTi, SBTi launches world-first net-zero corporate standard (28 October 2021); United Nations, High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities, Integrity Matters (2022); Press Information Bureau, CCPA issues Guidelines for Prevention and Regulation of Greenwashing and Misleading Environmental Claims (15 October 2024, Release ID 2064963); Department of Consumer Affairs, Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 (PDF); ASCI, Draft Guidelines: Environmental/Green Claims (16 November 2023); European Commission, Directive (EU) 2024/825 on empowering consumers for the green transition (Transition Pathways page); Directive (EU) 2024/825, Official Journal of the European Union; MoEFCC, India First Biennial Transparency Report (BTR-1) to the UNFCCC; ISO 14068:2026 Climate change management: Carbon neutrality (ISO committee page; replaces ISO 14068-1:2023); SBTi blog: Countdown to validation: new resources to prepare for the Corporate Net-Zero Standard V2.0 (2026)
This article was prepared with AI assistance and checked by the GreenEye team against the sources shown in each section.
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