Carbon insetting

Posted by Flux on 

14 March 2022

What’s trending?
Carbon insetting refers to an investment in emissions reduction projects within the supply chain of a company in the sector where they are embedded. This is in contrast to carbon offsetting which refers to carbon credits purchased from carbon reduction projects that are unrelated to the purchaser. Insetting is already gaining momentum among some of the UK’s leading businesses. Through working with their supplier, rather than investing in external projects, the investment stays within the organisation’s value chain. Burberry is helping to restore biodiversity for sheep farmers in Australia for example. 

Why is it important?
Carbon insetting helps companies meet their sustainability goals, drive the decarbonisation of the sector and make a tangible impact on the communities in which they operate. This approach is not just good for the environment, there are economic benefits too. Insetting can also assist a company gain a reputation for being an environmental leader in its industry and help strengthen stakeholder relationships. Since carbon insetting projects are linked directly to the company, they are more likely to be maintained in the long term. One potential issue with carbon insets is that there is no required certification of the carbon benefit. However, some carbon inset organisations work with third parties to verify and audit their projects. Offsetting is currently cheaper than insetting. However over the coming years the price of carbon credits is expected to rise ten-fold as demand increases. This means that offsetting will become an increasingly expensive way for businesses to reduce their emissions and will most likely become outdated. 

What can businesses do about it?
Businesses are beginning to shift from offsetting to insetting. You can look for projects in or close to your supply chain to identify carbon insetting opportunities. Transitioning to insetting can be done in-house or by enlisting the help of a third party organisation which assists businesses with setting this up. myclimate is one such organisation that offers carbon insetting as a holistic concept. 

By Faeeza Khan
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Image credit: Dan Meyers

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