Carbon Insetting, Everything You Should Know!

Insetting is not a very popular term, even in the sustainability niche. Mainly because it is largely corporate in nature and strongly leans towards supply chain analysis⁠—something that might sound foreign to most consumers.

But though the term may be strange to your ears, we’re sure you’ve heard of brands engaged in insetting, although the word itself is hardly ever used in typical brand lingo.

Far more common is the concept of carbon offsetting, which is the practice of purchasing carbon credits to offset a company’s carbon emissions throughout production.

And while the two are quite different from each other, they’re just two sides of the same coin and serve a united goal⁠—to achieve lower GHG emissions and help curb impending climate disaster.

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What is Carbon Insetting?

Carbon insetting is a business practice where companies engage in activities that lessen their carbon impact. These often revolve around carbon sequestration, sustainable management practices, and regenerative agriculture practices, among many other sustainability measures.

The key thing to remember about carbon insetting projects is that they must be done within the company’s own value chain.

Meaning, that carbon insetting activities will have to involve steps within the company or product’s value/supply chain. These projects most commonly occur during the early stages of production, such as raw materials sourcing.

Carbon offsetting projects may also occur further on with distribution and sales. However, these generally have less of an impact on a company’s carbon footprint than sourcing.

Let’s take a cotton t-shirt, for example. As most of us know, cotton is a thirsty, dirty crop. You can read more about it here.

Cultivating conventional cotton requires excessive use of water and pesticides that eventually render any end product an unsustainable material.

One way to apply insetting projects in this context would be using regenerative practices in planting cotton. This way, the manufacturer would be relying on nature-based solutions to lessen their environmental impact and create a more sustainable business model.

Some companies choose to exclusively use organic cotton in their collections, which is also another way of applying insetting to their own supply chain. Each step of the process where companies attempt to reduce their carbon emissions can be considered a part of insetting.

In most cases, it is not the manufacturer or label itself that harvests or cultivates the raw materials. More often than not, materials for production are sourced from third-party farmers and suppliers, many of whom are victims of exploitation.

Insetting forces businesses to invest not only in the financial progress of the business itself but also in generating value through positive impact on the environment and society.

With carbon insetting projects, these companies curb indirect emissions and contribute to attaining global climate targets.

What is an Indirect Emission?

Indirect emissions are a central feature in insetting. These types of emissions are not technically considered as directly related to the company’s operations but are still generated due to the same.

For instance, while raw materials sourcing may technically be part of supply chains, this step is typically not considered when a company wants to achieve carbon neutrality. Only direct company activities like production, marketing, and distribution are involved.

Meaning, that these indirect operations, although central to a company’s products, do not technically count toward a company’s carbon footprint.

This poses a major issue, primarily since a lot of the carbon dioxide a product generates occurs very early on in the supply chain⁠—although this may not be the case for all industries.

By supporting carbon insetting projects, companies can guarantee their customer base that their sustainable practices are not superficial and are actually rooted in real climate action.

In addition, curbing indirect carbon emissions help widen the scope of a company’s carbon initiatives, allowing them to move beyond direct and ancillary business activities and actually attain sustainable development goals.

What is Carbon Offsetting?

Carbon offsetting is a far more familiar term to us in the sustainability niche. Essentially, it is the practice of purchasing carbon credits to offset the carbon footprint of a company.

Carbon offsetting does not actually tackle the root cause of carbon generation and is a more reactive solution than a proactive one.

Yet, it is incredibly popular because it is easy to implement, easy to measure, and companies have the added benefit of being able to claim they are carbon-neutral. And if you’re a customer, buying carbon-neutral items seems like the most prudent choice.

Carbon offsets often come in the form of renewable energy initiatives or tree planting activities to reduce emissions. Companies are generally not involved in these activities and merely purchase the carbon offset for a price.

Carbon offsetting, while a good initiative, is not a sustainable answer to our pressing climate change concerns. Rather than tackle the direct cause of GHG emissions, offsetting merely relies on negating carbon impact.

In the long run, this is not a sustainable practice because it doesn’t actually help us reduce emissions. Companies are not required to look deeper into their own value chain and really analyze where they are generating the most environmental impact.

In other words, carbon offsetting projects are merely a band-aid solution. And while at this time, they are definitely valuable, they should not be the only solution companies work towards.

Insetting Vs. Offsetting

The most critical consideration in comparing insetting and offsetting is that the two are not mutually exclusive. A company can very much use insetting and offsetting as a way to reduce their environmental impact.

In fact, the most sustainable brands we have come across do precisely this. Rather than just focus on undoing emissions through carbon offsets, sustainable companies also focus on emissions reductions throughout the value chain.

This could mean anything from using more sustainable materials, choosing plant-based options, and investing in carbon insets, among others. If there are any unavoidable emissions, then carbon offsetting can enter the picture.

These types of companies are aware of their impact on the planet and try to reduce said impact by tackling all activities in their supply chain.

Proactive Vs. Reactive

Insetting is most definitely the more proactive choice and should be a company’s first option when it comes to sustainability goals.

Meanwhile, carbon offset projects remain a reactive choice and should be used when there are no other alternatives or when all proactive options have been exhausted.

Internal Vs. External

Carbon insetting largely relies on internal processes. Carbon insetting projects occur within the value chain and are highly related to companies’ core business models.

Nature-based solutions in the form of insetting almost always have to do with raw material sourcing, which is where companies can capitalize on natural resources by improving soil health and supporting local communities.

Carbon offsetting, on the other hand, centers around reducing greenhouse gases through external projects that may or may not be related to the company’s main activities.

Interactive Vs. Noninteractive

Any given insetting project requires the dedication and cooperation of the company involved. If a brand wants to undertake carbon insetting projects, it will have to invest not just money but also time and effort.

Insetting is a serious undertaking that requires a considerable amount of resources⁠—something not many companies are willing to contribute.

Offsetting does not require nearly as much time and attention. As carbon offsets are mainly third-party projects with their own GHG reduction activity, companies typically will not need to exert much effort to achieve net-zero.

While this may be a good thing for the company, it also has some drawbacks. One of the most important is how the company may not know (or care) exactly where their money is going or if the projects are actually a valuable solution to fight climate change.

This is especially true in companies where climate resilience is treated as just another marketing tactic.

If the company does not have the best interest of the planet at heart, then they would not care whether the projects are actually reducing emissions, so long as the company itself can claim to be eco friendly.

Is Insetting the Solution?

Insetting is one of the best options companies have to achieve net positive emissions while also retaining their economic growth benchmarks.

But it is important to reiterate that insetting is not the most credible solution to climate change, especially when considered on its own.

Many carbon insetting projects focus on breathtaking nature-based solutions that often revolve around reducing land-use footprint, creating deforestation-free commodities, ecosystem regeneration, etc.

These are already amazing steps that help many companies further their sustainability goals.

But at the end of the day, insetting is very much a corporate concept. It relies on us being consumers to work. It frames eco-friendliness and sustainability in the context of consumption and profit.

And while that may be appealing to some people, it may not be the solution we are looking for if we want systemic change to happen.

Depending on what greater ethos you believe in, insetting as the ultimate driver of emission reduction may or may not be the solution.

In our opinion, it’s not⁠—but it’s definitely a great start.

While carbon insetting is an incredible way to promote and attain GHG reductions, carbon insetting is just another tool in today’s hyper-consumerist society.

Yet despite this critique for carbon insetting, it remains one of the best ways to us to reduce our greenhouse gas emissions using tools and systems that we have today. Because as much as we’d like to think otherwise, we are very much living in a society that loves to consume.

Consumption, in its very base sense, is not eco friendly. And while consumption is integral to all life, we humans have breathed a completely new form to the term⁠—one that isn’t exactly kind to the environment.

Final Thoughts

Carbon insetting is arguably one of the best, if not the best, way businesses can attain improved environmental outcomes throughout their value chain.

Implementing carbon insetting projects isn’t cheap. The more that companies act outside of profits’ interest alone, the more they signal to their customers that they’re serious about doing environmentally-friendly business.

Despite this being the case, carbon insets work best when paired with other eco friendly and socially sustainable practices.

So when you see brands using renewable energy in their offices, using eco friendly fibers, and supporting local economies at the same time, you’ll know that they’re most likely trying to implement insetting in their business.

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