While carbon offsetting has served as a common strategy for achieving our net-zero emissions by 2050 goal, carbon insetting has emerged as a new approach to accelerate corporate sustainability. We have less than a decade to halve our emissions, so the pressure is on the public and private sectors to lower emissions.Â
The carbon insetting approach is gaining traction because it focuses on reducing emissions within a company’s own supply chain whilst also strengthening business operations and relationships within the value chain. Keep reading as we dive further into carbon insetting, its benefits and how it can be adopted in a decarbonisation strategy.Â
What is carbon insetting?Â
Carbon insetting is a sustainability strategy where companies take actions to reduce greenhouse gas emissions within their own value chain or supply chain, rather than through external offset projects. Unlike traditional carbon offsetting, which often involves purchasing carbon credits from unrelated projects, insetting focuses on reducing or capturing emissions within the company’s direct sphere of influence.
Insetting projects are implemented within the company’s value chain. They involve suppliers, producers, and communities directly connected to the business. This approach aligns environmental benefits with the company’s operational footprint. Moreover, these projects often create more than just carbon benefits, such as improving product quality, increasing yield, strengthening supplier relationships, and boosting resilience to climate risks.
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Key benefits of carbon insettingÂ
Carbon insetting offers a range of benefits, particularly for companies aiming to reduce their carbon footprint in a way that directly supports their supply chains and surrounding ecosystems. Below are some of the main advantages.Â
Enhanced supply chain resilience
By investing in projects within their own supply chains, companies can enhance resilience to climate impacts. For example, supporting sustainable agriculture practices can improve soil health, increase yields, and make suppliers more resilient to extreme weather, benefiting the entire supply chain.
Improved environmental impact
Carbon insetting goes beyond mere carbon offsetting by directly improving environmental conditions within the company’s operational ecosystem. This approach often involves restoring natural habitats, conserving water, improving biodiversity, and reducing soil erosion.
Strengthened stakeholder relationships
Engaging in carbon insetting strengthens relationships with local communities and suppliers, as these projects often bring direct benefits to local ecosystems and economies. This can improve brand loyalty, enhance corporate reputation, and foster a more sustainable partnership with key stakeholders.
Cost savings
By creating more sustainable supply chains, companies may reduce costs in the long term. For instance, sustainable farming practices can lower dependency on chemical inputs, reduce water usage, and improve resource efficiency, leading to lower production costs.
Alignment with sustainability goals
Carbon insetting supports a company’s broader sustainability goals and aligns with frameworks like the UN SDGs. This approach can enhance a company’s ESG performance, making it more attractive to environmentally-conscious investors and customers.
Transparency and credibility
Since insetting takes place within a company’s supply chain or direct sphere of influence, it often provides greater transparency and credibility compared to traditional carbon offsetting. This can reassure stakeholders that the company is genuinely committed to sustainability rather than merely compensating for emissions elsewhere.
Positive social impact
Carbon insetting projects often support local communities by improving livelihoods, providing training on sustainable practices, and creating employment opportunities. This social impact can reinforce a company’s CSR efforts.
Increased employee engagement
Companies that are visibly engaged in meaningful sustainability initiatives often experience higher employee morale and engagement. Employees feel more connected to a purpose-driven organisation, which can improve job satisfaction and retention.
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Conclusion
Incorporating carbon insetting into a corporate sustainability strategy allows businesses to tackle emissions in a way that directly supports their operations, supply chain resilience, and stakeholder engagement. By investing in emissions reductions within their own ecosystem, companies can create a sustainable, transparent, and impactful approach to meeting climate goals.Â
As decarbonisation becomes critical for long-term success and the 2050 deadline approaches, now is the time for organisations to equip themselves with the knowledge and skills needed to take meaningful action. Browse our online sustainability courses and discover how they can help you design and implement strategies that address complex sustainability challenges.Â
