Carbon insetting — investing in carbon reduction projects within their own supply chain — is becoming increasingly popular among those trying to reduce emissions and improve their environmental credibility. Let’s look at what it means and how organizations incorporate this into their value chains.
What does carbon insetting actually mean?
Carbon insets are primarily intended to assist companies and businesses in addressing the massive challenge of climate change and biodiversity loss. However, it’s also a one-of-a-kind way to limit emissions, while still generating revenue.
Simply put, carbon ‘insetting’ focuses on doing more good within a value chain rather than doing something less harmful.
How does carbon insetting work?
According to the International Platform for Insetting, firms use nature-based solutions like reforestation, agroforestry, renewable energy, and regenerative agriculture to reduce greenhouse gas (GHG) emissions from their own supply chain.
Agroforestry and reforestation can help small-scale farmers lock atmospheric carbon in the soil or trees. This results in carbon withdrawal and lowers GHG emissions. Farmers also receive payments for supplying raw materials to the investing organization.
How does a company implement insetting?
When it comes to climate management, insetting is one of the best climate protection methods for organizations. The company can pick strategies and makes project decisions that best suit its focus, feasibility, and ability to reduce emissions.
- A company can begin its insetting journey by first evaluating its supply chain to understand where most of its GHG emissions stem from.
- The business can further look at its energy sources, and invest in renewable energy sources like solar and wind power.
How does carbon insetting help a business?
There is no one-size-fits-all solution as each insetting project is tailored to the demands of the individual and the capabilities of the organization. But, insetting allows businesses to look at several aspects of their operations with fresh eyes.
Most businesses finance a carbon reduction project or invest in carbon offset programs to offset their carbon impact. However, unlike other carbon offset projects, carbon insetting allows enterprises to strengthen their ties with their suppliers. They achieve this by partnering with them to reduce indirect emissions generated across the supply chain. It also helps a company establish a stronger reputation as a responsible firm.
Carbon insetting VS carbon offsetting
Carbon insetting ensures that a company is directly responsible for the carbon emissions in its supply chain. As a result, long-term management practices are strengthened directly from the source. Companies find this more appealing, as investing in these inset projects enhances a company’s supply network while enhancing the quality of its raw resources.
On the other hand, carbon offset is any action that compensates for the emission of carbon dioxide or other greenhouse gases by reducing emissions elsewhere. The purchaser and the offset provider are discrete entities in most carbon offsetting initiatives. In contrast, carbon inset projects are a collaborative effort between the developer and stakeholders of one or more firms.
Examples of carbon insetting
- Ben and Jerry’s
The company financed small-scale vanilla farmers in Uganda to create intercropped agroforestry systems to improve and diversify production, by funding the Rwenzori project. In and around the vanilla plots, 100,000 native trees were planted, providing shade and allowing the farmers to diversify their income. One of Ben & Jerry’s sustainability programs, ‘Caring Dairy,‘ also helps each farm’s financial sustainability by lowering the costs of bedding, hauling, and spreading waste.
- Nespresso – The Positive Cup
As part of The Positive Cup‘s commitment, Nespresso will ‘inset’ the carbon footprint of their operations. Working with Pur Projet, they are planting trees in and around Nespresso AAA Sustainable Quality™ coffee farms to capture carbon. As a result, by 2022, every cup of Nespresso coffee, both for at-home and professional consumers, will be carbon neutral. “Climate change is a reality, and our future depends on going further and faster on our sustainability commitments. That is why we are accelerating our commitments to offer our consumers a way to drink a carbon-neutral cup of coffee by 2022,” stated Guillaume Le Cunff, CEO of Nespresso.
The takeaway:
Carbon insetting is an investment for a better future. To summarize, it is not the end of carbon emissions, but it is a good start toward a better planet. Not just as a business but also consider your carbon footprint level as an individual. Here are some simple tips to reduce your carbon footprint.
