Blog Post

What is Carbon Insetting?

Carbon insetting is a concept that focuses on reducing carbon emissions within the supply chain of a company or organization, or as defined under the logistic, transport and recycling sectors, to fund an emission reduction within the same sector (see book & claim hereafter). This opposes the concept of carbon offsetting, which involves compensating for emissions through external projects. The insetting approach integrates carbon reduction projects directly into a company's operations or (parallel) supply chain, fostering sustainability from within.

The key difference between carbon insetting and offsetting lies in their approach to addressing carbon emissions. While offsetting projects might involve investing in renewable energy or reforestation programs anywhere in the world, insetting projects are directly linked to a company's own activities and are designed to reduce the carbon footprint within its own operational scope or supply chain.

Carbon insetting can involve a variety of projects, such as switching to low carbon fuels, vessel retrofits, rotor sails, recycling, improving energy efficiency, or enhancing ecosystem services within the supply chain. These projects not only reduce greenhouse gas emissions but can also offer additional benefits like biodiversity conservation, enhanced social impacts, and strengthened relationships with suppliers and customers.

By implementing carbon insetting projects, companies can make a direct impact on their environmental footprint, demonstrating a commitment to sustainable practices and taking responsibility for their emissions. It allows businesses to integrate sustainability into their core operations and create value for both the environment and society.

Challenges of Insetting

Managing insetting projects does not come without challenges. Many companies have intricate, global supply chains. Understanding, measuring, and effectively reducing carbon emissions across these networks can be complex, requiring significant expertise, time and resources.

From measuring the carbon footprint to impact verification, it also often takes a behavioural change at different levels of the organization. Cultivating a culture that prioritizes sustainability and adapts to new practices can take time and effort. Moreover evolving standardization of methodologies and environmental regulation leaves room for interpretation.

To overcome these challenges, guidance from experts such as CarbonLeap, the pioneer in supply chain decarbonization, can support management in driving the sustainability agenda.