As the notion of climate change continues to gain traction, carbon credits have become a critical tool in the arsenal of environmental strategies. Traditionally, this involved organizations offsetting their carbon emissions by investing in external environmental projects. However, a new approach, known as insetting, is emerging as a transformative strategy. This article explores the concept of insetting, its significance, and its potential impact on climate change mitigation.
Insetting differs from traditional carbon offsetting (climate contribution) by focusing on reducing emissions and enhancing sustainability within an organization's own supply chain or operational sphere. Instead of investing in external projects to balance their carbon footprint, companies engaging in insetting implement practices that directly reduce their carbon emissions at the source.
For more information on the transition from using the terminology carbon offsetting to climate contribution, please download our guide.
Scope 3 emissions, often referred to as value chain emissions, encompass indirect emissions not produced by the company itself but are a consequence of the company's activities, both upstream and downstream. These can include emissions related to the production of purchased goods and services, transportation of purchased goods, business travel, and the use of sold products and services, among others.
Insetting, on the other hand, is a concept that involves investing in sustainability projects within a company's value chain to offset its carbon footprint, rather than investing in external carbon offset projects. The idea behind insetting is to create positive environmental, social, and economic impacts directly within the scope of a company's operations and supply chain.
The relationship between Scope 3 emissions and insetting is quite direct:
Scope 3 emissions analysis helps companies understand their broader environmental impact, while insetting offers a pathway to directly address and mitigate these impacts within their value chains. Both are integral to comprehensive climate action strategies for businesses seeking to reduce their environmental footprint.
An example of insetting could involve a company working directly with its agricultural suppliers to implement sustainable farming practices. This might include transitioning to organic farming, implementing soil regeneration techniques, or adopting water-efficient irrigation systems. These practices not only reduce emissions associated with farming but also can improve soil health and biodiversity. By investing in these changes within their supply chain, the company helps reduce its Scope 3 emissions while supporting more sustainable agricultural practices.
While insetting offers significant benefits, it's not without challenges. It requires a deep commitment and often a substantial initial investment. Moreover, measuring the direct impact on carbon reduction can be complex, and there may be a need for standardization in how insetting impacts are quantified and reported.
As global awareness of the climate crisis grows, insetting is likely to gain more prominence. This approach aligns with the increasing demand for corporate transparency and responsibility in environmental matters. The future may see more companies integrating insetting into their sustainability strategies, thus contributing more effectively to global climate change mitigation efforts.
All insetting projects undertaken must adhere to certain key principles for best practices. These include ensuring that the project brings additional environmental benefits that wouldn't occur otherwise, the permanence of these benefits, clear legal and carbon rights, meeting specific eligibility criteria, producing real and quantifiable results, avoiding double counting of emissions reductions, obtaining stakeholder consultation and consent, and ensuring no harm while also generating further environmental and community advantages.
Insetting represents a significant shift in how companies approach carbon credits and climate contribution. By focusing on internal changes and improvements, it offers a more integrated and potentially more effective approach to reducing carbon emissions.
At ClimateSeed, we believe that if this practice gains traction, it could play a crucial role in global efforts to combat climate change, signaling a new era of corporate environmental responsibility. For more information, please, contact us.
Sources: