What is Carbon Insetting? And How Does it Differ from Offsetting?

So you may have heard of carbon offsets but there’s a (relatively) new sustainable supply chain management strategy on the block: carbon insetting.

This post will break down what carbon insetting is, how insets are different than offsets, and some examples of carbon insetting.

What is carbon insetting?

As opposed to carbon offsets where an organization pays for projects to capture atmospheric carbon dioxide somewhere else, carbon insets are when an organization invests in sustainable practices within its own supply chain. Carbon insets support the implementation of practices — often through agroforestry and tree-planting projects — that sequester carbon, promote climate resilience, protect biodiversity, and restore ecosystems.

As the International Insetting Platform explains, “insetting represents the actions taken by an organization to fight climate change within its own value chain in a manner which generates multiple positive sustainable impacts.”

These carbon inset projects are said to provide a much more holistic approach than offsets because they take into account more than just carbon sequestration, but the entire ecosystem as well as the communities and farmers. (Though there are certainly carbon offset projects that take a holistic environmental and social approach as well.)

One potential issue with carbon insets is that there is no required certification of the carbon benefit. However, some carbon inset organizations, such as PUR Projet, work with third parties to verify and audit their projects.

Insets vs. Offsets: Are carbon insets better than carbon offsets?

Carbon offsets have received quite a bit of criticism for a number of reasons. There are of course the stories of scams where groups try to sell offsets that aren’t even real. But even with third-party verifications and certifications, there are some tricky issues such as permanence (will the trees planted be left there or cut down for timber as soon as they hit maturity?) and leakage (did that carbon offset for forest preservation just cause trees to be cut down somewhere else?)

Critics have also called carbon offsets “a license to pollute” and even compared offsets to indulgences, saying that purchasing offsets basically gives companies and individuals wealthy enough to purchase them a way to pay to remove their guilt from emitting carbon without actually lowering their own carbon footprint.

Carbon insets, on the other hand, ensure a company is taking direct responsibility for the carbon emissions in their own supply chain and are improving sustainable management practices directly at the source. Carbon insetting can also be more appealing to companies because investing in these inset projects can help make a company’s supply chain more resilient and improve the quality of its raw materials.

That said, carbon insets are more limited by their very nature because they only address Scope 3 emissions (indirect emissions from a company’s supply chain like raw material sourcing). They do not address Scope 1 (emissions a company directly controls like manufacturing) nor Scope 2 (emissions from the energy that the company buys) emissions.

This means retailers selling other brand’s products or service-based businesses that don’t source raw, natural materials cannot really participate in carbon insets. It also means even a product-based business cannot become carbon-neutral only by using carbon insets.

In short, carbon insetting is best thought of as a piece of the sustainability puzzle for a company. Brands must continue to focus on carbon emissions-reduction initiatives, such as transitioning to renewable energy.

Carbon insets also aren’t necessarily designed to replace carbon offsets. Insets can (and should) be used in tandem with offsets and emissions-reduction strategies.

What are some examples of carbon insetting?

Burberry

Burberry announced in February 2020 that the brand has created a “Regeneration Fund” to support its portfolio of carbon insetting projects across its global supply chain.

For its first carbon insetting project, Burberry has partnered with PUR Projet to create and implement regenerative farming practices with some of Burberry’s wool producers from Australia. As Burberry explains, “the project will work at farm level to improve carbon capture in soils, improve watershed and soil health, reduce dryland salinity and promote biodiverse habitats.”

Ben and Jerry’s

Ben and Jerry’s has also partnered with PUR Projet for carbon insetting initiatives. The company financed the Rwenzori project in Uganda, which helped small-scale vanilla farmers build intercropped agroforestry systems to improve and diversify production. 100,000 native trees were planted in and around the vanilla plots, which provides shade and enables the farmers to diversify their income.

Nespresso

Nespresso has also engaged with carbon insets, investing $600 million over the course of 5 years in plant 10 million trees in Mexico, Nicaragua, Ethiopia, Columbia, and Guatemala. Working collaboratively with local communities, Nespresso’s partner PUR Projet only plants native tree species and hires farmers and community members to do the planting for this initiative.

For more examples, visit PUR Projet’s Insetting Programs Page