Carbon insetting is an innovative approach to carbon footprint reduction that helps companies meet their sustainability goals while supporting actions that are relevant to the company’s stakeholders.
Companies are using carbon insetting to embed sustainable practices into their own value chains while reducing their carbon emissions.
What Is Carbon Insetting?
Carbon insetting is an innovative mechanism to reduce emissions while driving business value.
It uses organization investment to promote sustainable practices and reduce your company’s carbon footprint within your own value chain.
Many carbon insetting projects are agroforestry related.
However, focusing your sustainability efforts on your own value chain helps you avoid the sustainability cliche of a ton is a ton so it doesn’t matter where and how you reduce emissions. It can help you build a stronger reputation as an environmental leader in your industry.
How Carbon Insetting Works
Smallholder farmers who practice agroforestry, or reforestation, can lock atmospheric carbon in the soil or in trees. This leads to carbon sequestration and a reduction in GHG (greenhouse gas) emissions.
In return, the farmers receive payments that allow them to provide raw materials to the investing organization, as well as produce measurable environmental and social impacts within their communities.
The Difference Between Carbon Offsetting and Carbon Insetting
Carbon insetting is very similar to carbon offsetting, except the activities that lead to carbon footprint reduction take place within the context of the value chain.
What does that mean?
It means that carbon insetting is about so much more than simply reducing a company’s carbon footprint.
It is about businesses investing in the ecosystems their suppliers depend on to increase their resiliency and provide significant, measurable benefits to communities surrounding the value chain.
- With carbon offsetting, project development is usually for the “carbon market” generally, while carbon insetting projects are created by developers for specific businesses through exploring their supply chain and GHG emissions
- In carbon offsetting projects, the purchaser and the offset provider are normally discrete entities, while carbon insetting projects are a collaborative activity amon the developer and the stakeholders of one or more businesses
- Carbon offsetting projects are verified through programs such as the Voluntary Carbon Standard, while carbon insetting projects may use an independent auditor to assess results
- Total amounts, prices, and delivery conditions are always specified in carbon offsetting contracts, which focus on tonnes delivered. With carbon insetting, the focus is on creating emissions reduction capacity, and the specific total amount of reductions is of secondary importance and may be uncertain
Should Your Business Choose Carbon In
setting or Carbon Offsetting?
Benefits of carbon insetting projects
A 2015 research project showed that carbon insetting has the potential to be of real value to smallholder farmers and sponsoring corporations alike.
The study examined the case of smallholder farmers engaged in dual-purpose cattle production in Nicaragua.
It concluded that social reforestation is a viable mechanism for helping organizations strengthen their supply chain and become environmental leaders in their industry.
In addition to that, carbon insetting projects help address some concerns regarding the reliability and long-term effectiveness of carbon offsetting projects.
Since carbon insetting projects are directly embedded into the boundaries of the participating company, they are more likely to be maintained in the long term.
Limitations of carbon insetting projects
It only involves emissions reduction activities in Scope 3 (indirect emissions from activities within the company’s value chain).
You can find more information about carbon offsetting and insetting scopes in our FAQ section.
If you would like to make a bigger impact while working on your Scope 1 and Scope 2 emissions instead, a custom Help BuildTM project might be a better choice for you.
Additionally, consider whether your company is prepared to put in the amount of effort required to identify and develop carbon insetting opportunities.
While carbon offsetting can be a simple as writing a check to a project developer, you should not underestimate the effort involved in carbon insetting projects.
Not only do you have to work with external stakeholders to see a project through; there is by definition a more limited set of opportunities available to you within your own value chain. A carbon offset provider may be able to connect you with a project that is better suited to your current goals and values.
The potential issue of double-counting should also not be underestimated. Working with an experienced project developer is important in ensuring double counting is prevented
How NativeEnergy Can Help
It should be noted that carbon insetting and carbon offsetting are not mutually exclusive.
Companies can use a combination of strategies to meet their sustainability goals and achieve carbon neutrality.
If you are thinking about the best way to reach your company’s sustainability goals, NativeEnergy can help.
We connect companies with unique carbon offset projects that match their brand goals and values while making a real, measurable difference in communities around the world.