ISO 14068-1 Standard and Practice Cases: A New Era of Carbon Neutrality Claims  

1. Introduction

 1.1 Global Carbon Neutrality and Net Zero Trends 

In recent years, the challenges of global climate change have become increasingly severe, with frequent extreme weather events that have had a substantial impact on human society and the economy. The Paris Agreement in 2015 became a milestone for the international community, clearly stating that it would limit warming to 2 degrees Celsius this century and strive to move towards the goal of 1.5 degrees Celsius. This goal is not just an environmental issue but has gradually evolved into the core of national policies and economic strategies. 

In order to realize the vision of the Paris Agreement, advanced economies in Europe and the United States took the lead in announcing "net-zero commitments": the European Union, the United States, Japan, and South Korea have all set to achieve net-zero emissions by 2050; China has proposed a carbon neutrality goal by 2060; India extended the timeline to 2070. These national and regional declarations not only demonstrate a global consensus on carbon reduction but also gradually transform climate policies into cost and competitive challenges that companies must face through tools such as the Carbon Border Adjustment Mechanism (CBAM), Energy Transition Policy, and Emissions Trading System (ETS). Under such international pressure, companies have naturally become key players in net-zero actions. Multinational corporations have responded to the SBTi (Science Based Targets initiative), pledged to reduce carbon emissions through science-based paths, and joined renewable energy pledge organizations such as RE100. Big tech companies such as Apple and Microsoft have even delegated "net-zero requirements" to their supply chains, forcing upstream manufacturers to establish carbon inventory systems and propose emission reduction plans, otherwise they may be excluded from the cooperation list.

 Therefore, "carbon neutrality" is no longer just a voluntary sustainability slogan of enterprises, but has gradually become a ticket to trust in the capital market. Investors demand more transparent ESG disclosures, regulators establish mandatory regulations, and consumers express their preferences for green products with purchasing power. Carbon neutrality is not only about compliance but also directly linked to a company's market reputation, brand image, and capital acquisition. ISO 14068-1 was created in response to this global trend, providing a consistent, transparent, and verifiable international standard to help companies and public institutions establish more credible carbon neutrality claims on the path to net zero. 

1.2 Background and importance of ISO 14068-1 standard 

Before the emergence of ISO 14068-1, the main reference basis for global carbon neutrality was PAS 2060 issued by the British Standards Institution in 2010. This specification does make important contributions to promoting early carbon neutrality practices, but as the market size expands and application scenarios become increasingly diverse, its limitations are gradually emerging. The most questionable part is that PAS 2060 lacks transparency and consistency, and the statements of different organizations lack comparability and are even easily abused, leading to concerns about "greenwashing". This makes it difficult for many companies to declare carbon neutrality, but it is difficult for the outside world to judge whether their processes and results are credible. 

For this reason, the International Organization for Standardization (ISO) officially released ISO 14068-1:2023 "Greenhouse gas management and related activities — Carbon neutrality — Part 1: Specification with guidance at the" in 2023 after extensive consultation with experts and stakeholders from various countries organization level》。 The introduction of this standard not only fills the gaps in PAS 2060 but also establishes a consistent and verifiable international standard, providing a clear framework for carbon neutrality declarations. ISO 14068-1 does not stand alone, but complements existing carbon management standards. For example, ISO 14064-1 provides organization-level greenhouse gas inventory and reporting methods; ISO 14067 focuses on calculating the carbon footprint of products. ISO 14068-1 focuses on "how to achieve and declare carbon neutrality", which has become an important puzzle piece that connects the past and the future. Through the interconnection of these standards, enterprises and public institutions can follow consistent and transparent international norms in the process of inventory, reduction, and offset to the final declaration, avoiding ambiguity and making carbon neutrality statements more credible. 

2.Core Principles and Requirements of  ISO 14068-1 Principle

 2.1 (Subduct before offset, Transparency, Integrity, Avoidance of Double Calculation). 

The core spirit of ISO 14068-1 can be distilled into several guiding principles. First, there is "mitigation hierarchy". The standard clearly requires that organizations should first actively promote emission reduction and removal within their own boundaries, such as improving energy efficiency, introducing renewable energy, or utilizing carbon removal technologies, and only allow offsetting to neutralize "residual emissions" in unavoidable cases. This arrangement prevents companies from relying too much on purchasing carbon credits and ignoring their true responsibility to reduce emissions. Secondly, it is "comprehensive". When defining the scope of carbon neutrality, it must cover at least Scope 1 and Scope 2 (Scope 1 & Scope 2), and include material Scope 3 emissions. This requirement ensures that organizations do not overlook key emission sources, especially indirect emissions generated during supply chain and product use, during inventory and management processes. Finally, the standard also emphasizes "transparency" and "avoiding double counting". All carbon credits used for offsets must publicly disclose their sources, data calculation methods, and scope of uncertainty, and complete the cancellation on an internationally recognized login platform to ensure that the same reduction achievement is not claimed by multiple organizations at the same time. These principles are designed in response to criticism from the market that carbon neutrality claims lack consistency and lack credibility in the past, making ISO 14068-1 a more rigorous and trustworthy international standard.   

 2.2 Main steps (inventory, reduction, offset, declaration, and verification) 

Under the framework of ISO 14068-1, achieving carbon neutrality requires a clear and verifiable set of steps. The first step is to establish a baseline year inventory and a complete greenhouse gas inventory, usually according to ISO 14064-1 methodologies, to determine organizational boundaries, emission scopes, and major sources, and to scientifically quantify emissions. This base year is not only a benchmark for comparing carbon reduction results, but also a starting point for all subsequent plans.

 After completing the inventory, the organization must develop specific reduction and removal measures. Common ways include improving energy efficiency, introducing renewable energy, optimizing production processes, and gradually reducing one's own emissions through natural carbon sinks or technology-based carbon removal methods. These measures must set clear timelines and quantitative goals to ensure continuous tracking and review of results. However, even with the most aggressive carbon reduction measures, there are still some residual emissions that cannot be completely eliminated. These emissions need to be offset by purchasing and canceling qualified carbon credits. ISO 14068-1 requires organizations to publicly disclose the source of offsets and write-off records to avoid greenwashing concerns and ensure credibility. 

Finally, organizations need to compile the entire process into carbon neutrality reports and statements, which are verified by independent and professional third-party fact-checkers. Only through verification can organizations officially declare carbon neutrality. This set of "inventory-reduction-offset-verification" process ensures that carbon neutrality is not just a slogan, but a commitment that is supported by data, transparent and open, and can be trusted by society. 

2.3 Principles for setting base years and target years 

In carbon neutrality planning, the setting of base years and target years is crucial. The baseline year is the starting point for all emissions data, and it must be representative and ensure that the data used is complete, accurate, and traceable. If the data quality of the base year is insufficient, it will lead to a lack of credibility in the comparison of subsequent carbon reduction results, and may even affect the verification results. Therefore, when choosing a base year, organizations often choose a year in recent years that has complete activity data that reflects normal operating status, and keeps clear records of its data sources and methods. Correspondingly, the Target Year is the time when an organization declares carbon neutrality. This year must be specific and measurable, often planned in line with the organization's medium- to long-term strategy and external policy requirements. For example, if international or domestic policies and regulations require specific emissions reductions to be achieved by 2030, organizations need to complete relevant measures by the target year to ensure compliance and timeliness of their claims. 

More importantly, the base year and the target year should not be just two isolated time points, but should be linked through annual monitoring to clearly delineate the carbon reduction path from the starting point to the target. This path not only helps organizations review their own progress but also provides stakeholders with transparent information, ensuring that the outside world understands the authenticity and credibility of their carbon neutrality commitments. In other words, the base year is the "starting point" and the target year is the "end point", and continuous tracking and disclosure between the two is the core of carbon neutrality implementation. 

 3. Carbon Neutrality Implementation Process 

3.1 Greenhouse Gas Inventory (ISO 14064-1) 

In the process of carbon neutrality, greenhouse gas inventory is an indispensable first step, as only by understanding the current status of emissions can specific carbon reduction goals and strategies be set. ISO 14064-1 is an internationally accepted organization-level greenhouse gas inventory guideline, providing a complete calculation and reporting framework for enterprises and public institutions. This process is not only a technical operation but also a governance tool to ensure the comparability and credibility of subsequent carbon neutrality declarations.

 The first focus of the inventory is to clearly define the boundaries. Organizations must clarify their controls, including owned and operational assets, leased premises, and upstream and downstream activities closely related to operations. The definition of these boundaries directly determines the completeness of the inventory scope. According to international practice, at least Scope 1 (direct emissions) and Scope 2 (indirect energy emissions) should be covered, and material Scope 3 (other indirect emissions) should be included as appropriate, such as supply chain procurement, employee travel or product usage. 

Secondly, data collection is the core of the inventory. Organizations need to collect data on different activities, such as electricity consumption, fuel usage, refrigerant refills, and transportation miles, and convert them into carbon dioxide equivalents (tCO₂e) with appropriate emission factors. This involves the five principles emphasized by ISO 14064-1: Integrity, Transparency, Consistency, Accuracy, and Relevance. If a data governance process can be established based on these principles, the results of the inventory can gain the trust of the fact-checking agency and stakeholders. However, in practice, inventory often faces challenges. For example, Scope 3 data often comes from suppliers and may be difficult to obtain due to confidentiality or lack of management maturity; The data format of different bases is different, which increases the difficulty of integration; The electricity emission factor also varies from year to year or region, and if not updated in a timely manner, the calculation results may be distorted. 

Therefore, organizations need to design clear processes and tools to gradually improve data quality and establish internal verification mechanisms to reduce risks. After completing the inventory, the organization is required to prepare a greenhouse gas inventory report and establish a base year based on this. This base year report is the basis for all subsequent reductions, offsets, and verifications, without which it is impossible to verify the results. More importantly, the inventory report is not only an internal management tool, but also the basis for external disclosure and trust-building. Through an open and transparent inventory process, organizations can demonstrate their integrity and determination on the path to carbon neutrality, thereby laying a solid foundation for subsequent carbon neutrality management plans (CNMPs) and final declarations. In the carbon neutrality implementation process, greenhouse gas inventory is the first step and the foundation of all subsequent work. The following is a flow chart and a comparison table of the five principles to help understand its importance and practical application. 

Flow chart: The sequence of greenhouse gas inventory steps is suggested as follows (can be converted into a SmartArt flow chart in Word):

 1. Organizational Boundary

 2. Activity Data Collection

 3. Emission Calculation 

4. Quality Control (QA/QC) 

5. Preparation of a GHG Report 

6. Establishment of a Baseline Year 

Table: The Five Principles of ISO 14064-1  

3.2 Reduction planning and implementation 

After establishing the base year and inventory results, the next step is to develop and implement a specific reduction plan. The core goal of this stage is to gradually reduce the organization's emissions through technical measures and management systems, and to ensure that future carbon neutrality declarations are based on the principle of "reduce before offset". 

First, energy efficiency measures are the most direct and common way to reduce emissions. Through the replacement of lamps, the efficiency improvement of air conditioning and refrigeration systems, and the introduction of building energy management systems, it can not only effectively reduce energy consumption, but also demonstrate emission reduction results in a relatively short period of time. These measures often have a good payback period, making them a priority reduction option for many organizations. Furthermore, the procurement of renewable energy is another important emission reduction strategy. Organizations can choose to purchase green electricity or offset emissions from electricity use through international renewable energy certificates (T-REC, I-REC); Long-term power purchase agreements (PPAs) can also ensure a stable supply of renewable energy. These practices not only reduce Scope 2 emissions but also demonstrate corporate support for the energy transition. 

Finally, all reduction planning must be accompanied by clear key performance indicators (KPIs) and timeline management. Technical measures alone are not enough to ensure results, and organizations must set phased goals and review progress and performance through internal monitoring and management reviews. This arrangement avoids the formality of reduction plans and ensures that emission reduction pathways can be truly implemented and continuously improved.  

 3.3 Carbon offset strategies (carbon credit procurement, cancellation, and certification) 

Even if organizations actively implement energy conservation improvements and renewable energy measures, it is still difficult to completely eliminate all greenhouse gas emissions. Therefore, under the principle of "reducing first and then offsetting", carbon offsetting has become an indispensable means to neutralize residual emissions. The core concept of carbon offsets is to offset unavoidable emissions by purchasing carbon credits generated from qualified projects, and must complete retirement on a recognized registration platform to ensure that the carbon credits are not reused.

 (1) Sources and Market Types of carbon credits

 Carbon credits are mainly divided into two categories: the Compliance Market and the Voluntary Carbon Market (VCM). Compliant markets such as the EU ETS and California CCA usually have higher prices and relatively controlled fluctuations. The voluntary market covers a variety of projects, such as reforestation, renewable energy, waste treatment, and technology-based carbon removal (DACCS, BECCS), with large price gaps and uneven quality [Global Carbon Credit Market Price Report, 2025]. This makes it essential for organizations to strictly review sources and standards when purchasing carbon credits.

 (2) Quality judgment of carbon credits 

ISO 14068-1 emphasizes that all carbon credits used for carbon offsets must have "additionality", "permanence", "verifiability", and avoid "double counting". Common international certification bodies include Gold Standard and Verra (VCS), whose project design documents (PDDs) and registration records provide transparency and become an important basis for determining the quality of carbon credits. 

(3) Cancellation mechanism and transparent disclosure

 The mere purchase of carbon credits is not enough to claim carbon neutrality, and the key lies in "cancellation". By completing the cancellation on international platforms (such as Verra Registry, Gold Standard Registry, CIX, or TCX, etc.), you can ensure that the reduction quota will not be repeatedly claimed. ISO 14068-1 requires organizations to maintain deregistration certificates and publicly disclose the type, quantity, serial number, and cancellation time of carbon credits used in carbon neutrality reports to increase external trust. 

(4) Risks and Management 

However, carbon offsets also face challenges. According to the 2025 report, most natural-based carbon credits are $7–24/ton, while technical removal is as high as $170–$500/ton. If organizations rely too much on low-cost carbon credits, they may reduce costs in the short term, but they may also bear reputational risks due to insufficient quality or being questioned by society for greenwashing. Therefore, it is recommended that organizations establish internal carbon credit strategies, balance cost and quality, and reduce offset ratios year by year to demonstrate their sincerity in continuous reduction. 

 3.4 Declaration and Verification (ISO 14068-1 Verification Process) 

Once the organization has completed the inventory, reduction, and offset, the final step is "declaration" and "verification". This stage is a critical conclusion to the carbon neutrality process, as it determines whether the outside world can truly trust the organization's carbon neutrality statement. ISO 14068-1 clearly specifies that organizations must compile a complete carbon neutrality report on all processes and disclose their emissions, reduction measures, offset sources, and write-off certificates in a clear and traceable manner. At the same time, the report must be accompanied by a claim statement explaining the scope, base year, target year, and inspection method of carbon neutrality to avoid misleading or overpackaging. 

However, self-assertion alone is not enough to establish credibility. According to ISO 14068-1, all carbon neutrality claims must be verified by an independent third-party fact-checker. These fact-checkers must review the completeness and reasonableness of inventory data in accordance with ISO 14064-3 standards, and confirm whether the evidence of reductions and offsets is true and valid. The verification process usually includes document review, data sampling, interviews, and on-site verification if necessary, culminating in a verification report and verification statement. 

After completing the verification, the organization can officially announce its carbon neutrality results. This usually includes three main contents: the full text of the carbon neutrality report, the verification statement issued by the fact-checking agency, and the cancellation certificate of the offset credit. Many organizations make these documents fully available on their official websites and include summaries in their annual reports or sustainability reports to demonstrate transparency. Such public disclosure not only complies with regulatory and standard requirements but also enhances the trust of investors, customers, and the public. 

It's important to note that declaration is not the end but the starting point for continuous improvement. ISO 14068-1 encourages organizations to regularly re-inventory and verify to avoid one-time actions becoming mere formalities. Only by institutionalizing verification and continuously disclosing subsequent reduction progress can carbon neutrality declaration become a part of organizational sustainable governance, rather than a short-term marketing method. 

Flow chart: Carbon neutrality declaration and verification steps 

The flow sequence is suggested as follows (which can be converted into a SmartArt flow chart in Word): 

1. Write a carbon neutrality report 

2. Write a claim statement 

3. Engage a third-party verification agency 

4. Verification process (document review, data sampling, interview, on-site verification) 

5. Issue a verification report and verification statement

 6. Disclosure to the public (official website, sustainability report, annual report)  

3.5 Carbon Neutrality Management Plan and Roadmap 

In promoting carbon neutrality practices, simply disclosing emissions from the base year and target year is often not enough to demonstrate the organization's determination and feasibility of carbon reduction. Therefore, the carbon neutrality management plan and carbon neutrality roadmap are key components of the ISO 14068-1 report, providing a clear picture of how the organization is gradually moving towards carbon neutrality.

 For example, the TDCC has planned a clear carbon reduction path in its carbon neutrality report. First, use 2022 as the base year to complete a complete greenhouse gas inventory; second, set 2030 as the target year and plan carbon reduction and energy transition measures year by year. In the management plan, TDCC not only lists specific short, medium, and long-term measures but also quantifies them into annual emission reduction targets, such as increasing the proportion of renewable energy usage, replacing energy-intensive equipment, and strengthening data governance. 

The carbon neutrality roadmap visually presents the changes in emissions from the base year to the target year in a graph. Through line charts or ladder charts, it shows the complete process of "base year → carbon reduction progress in each year → only residual emissions remaining in the target year → achieving neutrality through carbon sink offsets". Such visualization tools not only allow internal and external stakeholders to quickly understand the organization's carbon reduction logic but also help verify the rationality and consistency of its path. 

The case of the TDCC shows that carbon neutrality management plans and roadmaps have three major meanings: (1) Implementability at the governance level: Ensure that the organization incorporates carbon reduction actions in its annual operational plan through phased goals. (2) Transparent Disclosure: Disclose the carbon reduction ratio and remaining emissions in different years, allowing the outside world to track progress; (3) Verification Convenience: Provide clear data and timelines, allowing fact-checking agencies to more effectively assess the reasonableness of neutralization declarations. 

It is recommended to create a line chart with the X-axis for the year (2022–2030) and the Y-axis for emissions (tCO₂e). The chart can indicate the base year emissions, the annual reduction progress, the residual emissions in 2030, and the carbon sink offset. This diagram provides a visual representation of how organizations can gradually reduce emissions from the base year to achieve carbon neutrality. (Refer to the figure below. Carbon neutrality roadmap  

4. Case Sharing 

4.1 International Cases (Microsoft, Apple) 

Microsoft: Carbon Negative Emissions and Large-scale Carbon Removal Investment by 2030 

In 2020, Microsoft publicly committed to achieving carbon negative emissions by 2030 and "removing all historical emissions since its founding in 1975" by 2050. This commitment not only goes beyond the usual "net zero" but also means that the company will offset the existing impact with significant emissions reduction and removal actions. In the latest progress (2024 annual report), Microsoft noted that Scope 1 and 2 decreased by 6.3% from the 2020 baseline, but Scope 3 increased by 30.9% from the base year due to data center expansion and supply chain expansion, making the total volume 29.1% higher than in 2020. In response to indirect emissions that are difficult to completely reduce in the short term, the company continues to promote supplier emission reductions and internal carbon fees, and on the other hand, it expands long-term contracts with multiple carbon removal projects. According to the progress page announced in 2025, Microsoft has "signed" nearly 22 million tons of carbon removal in FY24, including about 169 tons of "neutralization in the current year", about 280 tons of "carbon negative emissions until 2030", and about 1,743 tons of "after 2031 (including historical emission neutrality)". Additionally, the company and Carbon Direct regularly update CDR (Carbon Removal) procurement guidelines as a threshold for evaluating project quality. In terms of governance tools, Microsoft adopted an "internal carbon fee" and raised the rate for some categories (such as business travel) to $100 per ton in 2022 to drive internal reductions and project investment. 

• Goals and scope: "Carbon negative emissions" by 2030, removing historical emissions since its founding in 1975 by 2050. 

• 2024/25 Progress: Scope 1+2 decreased by 6.3% compared to 2020, but Scope 3 increased by 30.9%, and the total volume was 29.1% higher than the 2020 benchmark. 

• Carbon removal procurement: FY24 has signed a contract for nearly 2,200 tons of removal (including about 169 tons of "neutralization in the current year"; by 2030 about 280 tons; 2031+ about 1,743 tons). 

• Mechanism and governance: Continuously update CDR procurement guidelines with Carbon Direct; Some categories of internal carbon fees will be raised to US$100/ton (such as business travel). 

Apple: Carbon neutrality across the entire value chain and green power expansion in the supply chain by 2030

 Apple announced "Apple 2030": Achieve carbon neutrality across the company, manufacturing supply chain, and product lifecycle by 2030. The company has achieved carbon neutrality at the operational level in 2020, and at this stage, the focus is on deep emission reduction at the supply chain and product manufacturing end. Progress from 2024 to 2025 shows that Apple's "Supplier Clean Energy Program" has introduced nearly 17.8 GW of renewable energy globally, "avoiding" approximately 21.8 million tons of CO₂e emissions in a single year in 2024. The company also increases the proportion of recycled and recycled materials and promotes logistics carbon reduction measures such as reducing dependence on air freight. On the product side, Apple has launched the first batch of "carbon-neutral" Apple Watch combinations since 2023, which includes 100% clean electricity during manufacturing and use, reducing overall product emissions by at least 75%, and then offsetting residual emissions with high-quality carbon credits. However, the European market has recently become stricter about product-level "carbon neutrality" statements, and German courts have restricted Apple Watch's neutrality claims, reminding companies to be more precise in disclosing methods and boundaries on product labeling. 

• Goals and Scope: Achieve carbon neutrality for the entire company, supply chain, and product lifecycle by 2030; In 2020, carbon neutrality at the corporate operating level has been achieved. 

• 2024/25 Progress: Suppliers have imported nearly 17.8 GW of clean energy, "avoiding" about 21.8 million tons of CO₂e in a single year in 2024; and improve recycled/recycled materials and reduce dependence on air freight. 

• Product-level demonstration: Starting in 2023, the "carbon neutral" Apple Watch bundle will be launched, with at least 75% reduction before neutralizing residue with high-quality carbon credits. 

• Regulatory risk: German courts restrict the use of Apple Watch in 2025 "CO₂ neutral" claims, indicating tighter scrutiny of product declarations in Europe.  

Reference 

1. Microsoft Blog（2020-01-16）: Microsoft will be carbon negative by 2030 — https://blogs.microsoft.com/blog/2020/01/16/microsoft-will-be-carbon-negative-by-2030/

2. Microsoft 2024 Environmental Sustainability Report（2024-05-15） — https://blogs.microsoft.com/on-the-issues/2024/05/15/microsoft-environmental-sustainability-report-2024/

3. Microsoft Environmental Sustainability Report 2025 Progress Page  — https://www.microsoft.com/en-us/corporate-responsibility/sustainability/report/

4. ESG Dive（2025-07-15）: CDR guidelines updates for Microsoft & Carbon Direct — https://www.esgdive.com/news/microsoft-carbon-direct-release-updated-carbon-dioxide-removal-criteria/753103/

5. Reccessary（2022）: Microsoft raised some of its internal carbon fees to $100/ton  — https://www.reccessary.com/en/news/Microsofts-internal-carbon-fee-to-raise-567-percent-as-Scope-3-emissions-jump-in-2021

6. Apple Newsroom（2020-07-21）: Apple commits to be 100% carbon neutral by 2030 — https://www.apple.com/newsroom/2020/07/apple-commits-to-be-100-percent-carbon-neutral-for-its-supply-chain-and-products-by-2030/

7. Apple Newsroom（2025-04-16）: Apple surpasses 60% reduction; 2024 Supply Chain 21.8Mt Emissions Avoided — https://www.apple.com/newsroom/2025/04/apple-surpasses-60-percent-reduction-in-global-greenhouse-gas-emissions/

8. Apple Newsroom（2023-09-12）: Apple unveils its first carbon neutral products — https://www.apple.com/newsroom/2023/09/apple-unveils-its-first-carbon-neutral-products/

9. Reuters（2025-08-26）: German court ruling on Apple Watch's "CO₂ neutral" claim  — https://www.reuters.com/sustainability/climate-energy/apple-watch-not-co2-neutral-product-german-court-finds-2025-08-26/ 

 4.2 Taiwan Case: TDCC 

As the core infrastructure of Taiwan's capital market, Taiwan Depository & Clearing Corporation (TDCC) not only plays an important role in the financial system but also takes the lead in implementing carbon neutrality goals in public institutions. According to its published Greenhouse Gas Emissions Carbon Neutrality Report, TDCC plans to gradually reduce greenhouse gas emissions from its operations, with 2022 as the base year and 2030 as the target year. In terms of specific results, TDCC has significantly reduced direct and indirect emissions during organizational operations through measures such as introducing energy-efficient lighting, optimizing air conditioning system efficiency, and procuring renewable energy. Compared to the base year, it is expected to achieve a reduction of 98.4%, with only a few unavoidable residual emissions offset through qualified carbon sink projects such as reforestation or internationally certified offsets. This approach aligns perfectly with the principle of "reduce before offset" emphasized by ISO 14068-1 and demonstrates its integrity in terms of transparent disclosure. Notably, TDCC took the lead in completing ISO 14068-1 verification in 2023, becoming the first financial market infrastructure in the world to be certified to this standard. This breakthrough not only highlights Taiwan's speed of following up on international carbon management norms but also provides a concrete example for financial institutions to practice carbon neutrality. Especially in the capital market, TDCC's carbon neutrality practices are highly exemplary and may influence domestic and foreign investors' expectations for sustainable governance in the financial industry in the future. Through this case, it can be seen that the practice of carbon neutrality is not only a topic for manufacturing or energy-intensive industries, but also for financial services and infrastructure units. TDCC's experience shows that through scientific inventory, effective reduction measures, and transparent offset and verification mechanisms, organizations can establish credible carbon neutrality statements within the framework of international standards. 

 5. Practical Challenges and Solutions to Carbon Neutrality 

5.1 Reduction Dilemmas 

In the process of promoting carbon neutrality practices, although "reduction priority" is a core principle consistently emphasized by international standards, practical implementation often faces multiple difficulties. Firstly, the difficulty and high cost of renewable energy are common challenges for many organizations. In Taiwan, for example, the renewable energy market is still limited by insufficient supply, limited grid carrying capacity, and high market prices for green certificates (such as T-REC). Even if companies are willing to buy, they may still be unable to implement it on a large scale due to difficulties in signing long-term contracts or high unit costs. This has led to progress in reducing Scope 2 emissions (electricity use) often more slowly than expected. Secondly, the cost of equipment replacement and payback period are also important limiting factors. Many energy efficiency improvements, such as refrigeration and air conditioning system replacements, process equipment replacement, or the introduction of building automation energy management systems, require high upfront investment. While it can save energy bills in the long run, the actual payback period can be as long as five to ten years, making it a financial burden for small and medium-sized enterprises with limited funds. This has led many companies to adopt low-cost, short-term effective measures first when planning carbon reduction, while delaying large-scale carbon reduction investments. These dilemmas show that although the principle of "reduce first and then offset" is highly reasonable, without policy support and market support, it is often difficult for enterprises to bear the high-cost transformation on their own. International experience also shows that even large multinational corporations often need government subsidies, tax breaks, or renewable energy investment incentives to overcome cost barriers and accelerate the energy transition. 

Therefore, in education and training or policy design, it should be emphasized that the reduction dilemma is not a failure of a single enterprise, but a structural challenge. Only through policy impetus (policy incentives) and market tools (such as internal carbon pricing, carbon fees, or carbon taxes) can we help companies truly overcome the barriers to reduction, so that carbon neutrality is no longer limited to paper declarations but can be implemented in concrete actions.  

5.2 Carbon credit market risks 

In the practical path of carbon neutrality, the use of carbon credits is an important tool for offsetting residual emissions. However, there are still many risks and challenges in the current carbon credit market, and without proper governance and information disclosure, companies will face reputational, financial, and compliance uncertainties. 

First, there is a lack of consistency between different standards. Although the major international voluntary reduction standards (such as Verra VCS, Gold Standard, ACR, CAR, etc.) all provide third-party verification and registration platforms, there are still differences in additionality, permanence, baseline methodology, and transparency of offset credits. This makes the same reduction project may be given different market value and credibility under different standards, making it more difficult for companies to judge when choosing carbon credits. 

Secondly, the price of carbon credits is highly volatile. According to the 2025 Global Carbon Credit Market Price Report, the price of Nature-based Solutions (NBS) in the voluntary market will be around $7–24 per ton, while technical carbon removal (e.g., DACCS, BECCS) may be as high as $170–500. Regional platforms such as Singapore's CIX or Taiwan's TCX also have significant price fluctuations due to different supply and demand conditions. Such fluctuations not only make it difficult for companies to set stable carbon reduction budgets but may also lead to market speculation. Furthermore, there are doubts about the quality of carbon credits. Although some low-priced carbon credits can reduce short-term compliance or declaration costs, if they lack authenticity and additionality, they may become "greenwashing" tools. Recently, there have been several international media reports pointing out that some forest protection projects exaggerate the reduction benefits in their calculations, causing companies that purchase such carbon credits to be questioned by the public. This shows that the quality inspection mechanism of the carbon credit market still needs to be strengthened, otherwise it will weaken the credibility of carbon neutrality declarations.

 Therefore, when planning carbon offsets, companies should establish an internal carbon credit procurement strategy, including targeting high-quality standards (e.g., Gold Standard, Verra), diversifying risk allocations (different project types and regions), setting internal minimum quality thresholds, and publicly disclosing the source of carbon credit use and cancellation certificates. Only in this way can we maintain social and market trust in carbon neutrality achievements while taking into account financial feasibility.  

5.3 Data Quality and Verification Challenges 

The credibility of carbon neutrality claims depends not only on reduction measures and the quality of carbon credits, but also on data quality and verification integrity. However, data quality remains one of the most common and difficult challenges in current practice.

 First, Scope 3 data gaps and lack of supply chain transparency. Since Scope 3 covers the entire value chain from upstream procurement, capital goods, transportation and logistics, employee travel to product use and end-of-life, enterprises often do not have complete and accurate primary data on their activities. Especially for small and medium-sized enterprises, supplier management capabilities are limited, often relying only on industry average emission factors or EEIO (Environmentally Extended Input-Output) model estimates. Although this method can fill the data gap, it leads to increased uncertainty and increases the difficulty of verification for fact-checkers. Secondly, the activity data is insufficient, so proxy data needs to be used. In the absence of direct measurement or complete records, companies often need to use alternative data, such as monetary expenditure to estimate capital goods emissions, or industry averages to estimate transportation emissions. While these methods are permitted in international standards (ISO 14064-1, GHG Protocol), the standards also emphasize the need to disclose methodological assumptions and the scope of uncertainty. If companies do not clarify this, it will undermine the transparency of carbon neutrality statements. 

Third, uncertainty management in the verification process. ISO 14068-1 and ISO 14064-3 require fact-checkers to review data sources, boundary setting, emission factors, and estimation methods. However, when reporting the heavy use of proxy data, fact-checkers often find it difficult to provide reasonable assurance, and in most cases, only limited assurance. This may affect the credibility of companies in capital markets or international supply chains. Therefore, data quality challenges are not only technical issues but also related to the credibility of carbon neutrality claims. Companies should gradually establish supply chain data collection mechanisms, such as through supplier questionnaires, cooperation platforms (such as CDP Supply Chain), or introduce digital carbon management systems to increase the proportion of first-hand data year by year. At the same time, the scope and uncertainty of the use of proxy data should be clearly disclosed, and traceable supporting documents should be established in accordance with the requirements of fact-checking agencies to improve the overall transparency of verification.  

5.4 Response Strategies

 In the process of promoting carbon neutrality, carbon credit market risks, and data quality challenges, companies must propose specific response strategies to ensure the credibility and sustainability of carbon neutrality declarations. The following three are the core directions commonly recommended in international and domestic practice: First, establish internal carbon pricing (ICP) to enhance decision-making drivers. Many multinational companies (e.g., Microsoft, TotalEnergies) have internalized carbon emissions into financial costs through shadow prices, internal carbon fees, or internal trading mechanisms, which in turn influence investment and procurement decisions. This not only helps assess the economic feasibility of different reduction options but also enables companies to adapt to external carbon fee or tax policies earlier and avoid policy risks. Second, strengthen supply chain cooperation and data governance. With Scope 3 emissions being the majority, it's difficult for companies to fully grasp them on their own. Supply chain questionnaires, digital platforms (e.g., CDP Supply Chain, EcoVadis), blockchain, or cloud-based data management systems must be used to improve data transparency and real-time. At the same time, working with suppliers to set carbon reduction targets and establish reward and punishment mechanisms can effectively promote carbon reduction collaboration in the value chain. 

Finally, communicate with the verification agency in advance to reduce the risk of being returned. During the ISO 14068-1 and ISO 14064-3 verification process, incomplete data sources or insufficient offset proofs are likely to lead to verification failures or delays. Enterprises should maintain interaction with fact-checking agencies at the beginning of report preparation to confirm the verification focus, methodology, and documentation requirements, and prepare for supporting evidence for proxy data and uncertainties. This not only improves verification efficiency but also ensures the reliability of the final carbon neutrality statement. 

In summary, carbon neutrality is not a one-time achievement, but a process of long-term governance and strategic evolution. Only by driving internal carbon pricing-driven decision-making, strengthening the foundation for reduction in supply chains, and communicating before verification to reduce risks can companies truly establish a resilient carbon neutrality path and gain an advantage in international sustainable competition.  

6. Education and Training and Organizational Promotion 

6.1 Internal Education and Training 

In the process of promoting carbon neutrality, internal training is the foundation for ensuring the understanding and participation of all members of the organization. If only a few sustainability or environmental personnel are relied upon, it is often difficult to effectively implement data collection and carbon reduction measures. Therefore, it is essential to improve employees' carbon neutrality literacy and practical skills through systematic training. 

First, the primary task of education and training is to help employees understand the basic concepts and processes of carbon neutrality. It includes the complete steps from greenhouse gas inventory (GHG inventory), reduction planning, carbon offsets, to final verification and declaration. This ensures that employees across different departments understand their roles and responsibilities, such as procurement focusing on supply chain emissions, information departments assisting with data integration, and operations departments implementing carbon reduction measures. Secondly, education and training must focus on the cultivation of data collection and management skills. The credibility of carbon neutrality claims is highly dependent on data quality, which is often scattered across different units, such as electricity bills, vehicle fuel consumption, travel records, supplier lists, etc. Through internal training, employees can master how to identify activity data, fill out standardized templates, use carbon management platforms, and understand the application scenarios of uncertainty and proxy data. This ability development can significantly reduce errors and omissions in the inventory process and improve verification efficiency. 

Finally, education and training should also be linked to performance appraisal and organizational culture. Many companies include sustainability courses in new employee training and regularly hold workshops or lectures to strengthen employees' understanding of climate risks and carbon management. At the same time, through internal testing, professional certifications, or reward systems, transforming employees' learning outcomes into concrete performance can further promote the development of organizational culture towards "sustainability-driven."  

6.2 Management System Construction

 Carbon neutrality should not be a single project but should be integrated into the organization's governance and performance management framework to form a continuously driven internal momentum. Effective management system design ensures that carbon neutrality actions are not only limited to policy declarations but also translated into decision-making grounds in daily operations. First, organizations should establish a Carbon Neutrality Taskforce as a dedicated unit for cross-departmental coordination and decision-making. The group can be convened by senior management and is staffed by departments such as sustainability, administration, finance, procurement, operations, and information. This design ensures that different departments have a good connection between data collection, reduction measures, and carbon credit procurement, and avoids missing out on responsibility. 

Secondly, carbon neutrality actions need to be included in organizational KPIs and performance appraisals. If you rely only on voluntary promotion, you often lack sufficient incentive effect. By incorporating carbon neutrality-related metrics such as energy efficiency, renewable energy proportion, and emission intensity reduction into departmental and individual performance, it not only increases employee engagement but also ensures management's emphasis on climate action. Some companies even bind carbon neutrality goals to compensation incentives to improve execution. In addition, the construction of management systems should emphasize governance transparency and continuous improvement. In addition to regularly reviewing the progress of reduction and the use of carbon credits, a dual mechanism of internal audit and external verification should also be established to ensure the credibility of carbon neutrality claims. Such institutionalized arrangements help organizations build long-term trust in international markets and meet the expectations of investors and regulators.  

6.3 External Disclosure and Communication with Stakeholders 

Carbon neutrality is not only the result of internal governance, but also requires communication with stakeholders through external disclosure to establish credibility and trust. Without transparent information, even if a company completes carbon neutrality verification, it may be questioned due to incomplete information. Therefore, establishing effective disclosure and communication mechanisms is an indispensable part of promoting carbon neutrality. First, organizations should set up a special section on their official website to disclose carbon neutrality reports and verification statements, along with carbon credit cancellation certificates and relevant data. This disclosure ensures that external stakeholders, including investors, customers, regulators, and the public, have a clear understanding of the scope of carbon neutrality, base and target years, and specific measures for reduction and offset. In accordance with the requirements of ISO 14068-1, transparent disclosure is a core means to avoid greenwashing. 

Secondly, companies should regularly communicate with stakeholders about the progress and challenges of carbon neutrality. For example, through annual sustainability reports, shareholder meeting presentations, supply chain meetings, or investor briefings, we continuously update our emissions reduction progress, offset strategies, and challenges. Such dialogue not only helps manage stakeholder expectations but also gathers feedback to further adjust carbon reduction strategies. Additionally, communication with stakeholders should be multifaceted, including digital platforms, press releases, social media, and thematic forums. For major controversial issues, companies should take the initiative to respond to avoid a crisis of trust caused by information gaps. Successful cases show that incorporating carbon neutrality information into ESG rating responses or CDP questionnaires not only enhances transparency but also adds points in international investment markets. 

In summary, external disclosure and communication are not simple information disclosure, but a continuous trust-building process. Only by adhering to the principles of high transparency, regularity, and interactivity can companies gain social support and recognition from the capital market on the road to carbon neutrality.  

7 . Conclusion

7.1 The Significance of ISO 14068-1 

The introduction of ISO 14068-1 has brought a pivotal turning point in the global promotion of carbon neutrality. In the past, in carbon neutrality practices, it was common for different countries or companies to follow their own standards and methods, leading to a lack of consistency and comparability in declarations, making it difficult for the outside world to assess their credibility. Today, ISO 14068-1 provides an internationally recognized set of specifications that establish a common language for how organizations define boundaries, inventory emissions, reduction planning, carbon offsets, and verification processes.

 Its core value lies in enhancing the credibility of claims and avoiding greenwashing. If carbon neutrality statements rely solely on the purchase of carbon credits without demonstrating sufficient reduction efforts, they are highly susceptible to doubts from stakeholders. ISO 14068-1 clearly requires "reduction before offset" and emphasizes transparent disclosure and third-party verification, enabling companies to not only declare their commitments to the outside world but also support their results with science and data. This institutionalized regulation can effectively distinguish between organizations that truly implement carbon neutrality and greenwashing that only stays in marketing and packaging. At the same time, ISO 14068-1 also symbolizes the unity of the global language of carbon neutrality. Whether companies are in Asia, Europe, or the Americas, adhering to the same standards allows investors, regulators, and supply chain partners to engage in dialogue on the same benchmark. This consistency is particularly important for multinational companies, as it not only reduces communication costs but also builds trust and competitiveness in the international market.

 Overall, the release of ISO 14068-1 is not only a technical standard setting but also an important milestone in the maturity of global sustainable governance. It not only helps organizations regulate their own actions but also establishes a common framework for measurement and verification internationally, laying the foundation for the promotion of global carbon neutrality.  

7.2 Organizations' Future Path to Net Zero 

Carbon neutrality is not the end, but an important milestone in the organization's journey towards net zero. ISO 14068-1 emphasizes that carbon neutrality declarations should be based on scientific inventory, reduction, and offset, and these actions also lay the foundation for the long-term net-zero transition.

 In the short term, the organization's primary task is to establish a complete greenhouse gas inventory system, clearly define organizational boundaries and emission scopes, and use base year data as the basis for reduction and offset. On this basis, completing carbon neutrality declarations and verifications can help organizations enhance external trust and respond to the expectations of capital markets, supply chains, and regulatory authorities. Entering the medium to long-term stage, organizations need to continue to reduce residual emissions and avoid over-reliance on carbon credit offsets. This includes large-scale renewable energy introduction, energy efficiency improvement, circular economy development, and investment in innovative low-carbon technologies. As international requirements for net-zero standards (such as the SBTi Net-Zero Standard) become increasingly stringent, organizations must gradually expand carbon neutrality to a more comprehensive net-zero pathway to ensure their competitiveness. 

Therefore, carbon neutrality should be seen as a "phased outcome": building credibility in the short term, and moving towards true net-zero emissions through continuous emission reduction and technology investment in the medium to long term. Only then can organizations position themselves in the global wave of net-zero transformation and integrate sustainability into their core competitive strategy.