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Writer's pictureLouise Talbot

Offsetting vs. Insetting: Why Your Business Should Think Inside and Outside the Carbon Box

In the race toward net-zero emissions, many businesses are turning to carbon offsetting as a quick fix to balance their environmental impact. But is this the right approach for your company, or could insetting—addressing emissions reductions within your own operations and supply chain—offer a more impactful path?



Before you write that check for a forest planting project in a distant land, let’s explore why insetting could make your offsetting strategy more meaningful, and how combining the two can drive real change.


Understanding the Difference: Offsetting vs. Insetting

Carbon Offsetting is a familiar concept for many. It involves funding projects that reduce or sequester carbon elsewhere, such as reforestation or renewable energy initiatives. The idea is to counterbalance the emissions your business produces.


On the other hand, Insetting involves reducing emissions within your own value chain. This could mean improving energy efficiency in your facilities, transitioning your vehicle fleet to electric models, investing in greener supply chain practices, or generating renewable energy on-site.


In simple terms, while offsetting compensates for emissions, insetting works to eliminate or minimise emissions at the source. Both are important, but the latter is often overlooked despite its ability to create lasting change.


The Pitfalls of Relying Solely on Offsetting


Accusations of Greenwashing: Businesses that rely solely on purchasing offsets without reducing their own emissions can risk accusations of greenwashing. It’s seen as “paying to pollute” rather than addressing the root cause of emissions.


Environmental Integrity Issues: Not all offsetting projects are created equal. Some don’t deliver promised emissions reductions, while others may cause unintended harm to local communities or ecosystems.


Certification reliability: Just like offsetting projects, certification bodies have seen backlash in the offsetting realm. An interesting conversation with a colleague opened my eyes to the misrepresentation and lack of reliability some certification bodies have provided surrounding carbon credits. So be sure to do your research on these separately.


Regulatory Scrutiny: As governments tighten regulations around carbon reduction, relying solely on offsetting may no longer be enough to meet legal obligations or align with climate pledges.


How Insetting Can Supercharge Your Sustainability Strategy

By focusing on insetting first, your business can achieve deeper and more authentic carbon reductions. Here’s why insetting deserves your attention:


Direct Impact on Your Carbon Footprint: Unlike offsetting, which happens elsewhere, insetting directly addresses emissions in your own value chain. Reducing your energy use, minimising waste, and greening your supply chain have immediate benefits for your carbon footprint.


Cost Savings: Many insetting initiatives, such as energy efficiency improvements or switching to renewable energy, can deliver significant cost savings over time. Reduced energy bills or lower transportation costs directly impact your bottom line. Of course, these require upfront investment and should align with the companies decarbonisation stratergy.


Stronger Stakeholder Relationships: Insetting often involves working with suppliers, employees, and local communities, leading to stronger relationships, greater engagement, and a positive brand reputation. It’s a chance to align your business values with action.


Future-Proofing Your Business: Investing in your own operations to become more sustainable builds resilience. Whether it’s facing rising energy costs, changing regulations, or customer demand for greener products, insetting prepares your business for a carbon-constrained future.


Combining Offsetting and Insetting for Maximum Impact

Of course, there can still be a role for offsetting. Not every emission source can be eliminated immediately, and high-quality offsets can support valuable environmental projects. But a strong insetting foundation makes your offsetting efforts more credible.


Here’s how to do it right:


Prioritise Insetting: Identify and implement opportunities to reduce emissions within your operations and supply chain as we discussed earlier. Covering the basis of switching to renewable energy, improving supply chain efficiency, investing in electric vehicles and boosting employee awareness training.


Select High-Quality Offsets: When it comes time to offset, choose projects that align with your mission and meet rigorous standards like Gold Standard or Verified Carbon Standard. Look for projects that offer “co-benefits” like biodiversity protection or social improvements. As we discussed briefly earlier, there have been controversial aspects of certification boards so please do your research prior to selecting your offsets.


Regularly Review and Verify: Whether insetting or offsetting, transparency is key. Implement auditing processes to verify the impact of your initiatives, and communicate results clearly to your relevant stakeholders.


Auditing Insetting Initiatives for Transparency

One way to ensure credibility and effectiveness is through robust auditing and verification. Here are a few approaches:


  • ISO 14064-3 Verification: This standard allows for independent verification of greenhouse gas reductions within your operations.

  • GHG Protocol Scope 3 Audits: Focused on supply chain emissions, these audits can verify reductions tied to insetting projects.

  • Specialised Environmental Consultants: External experts can evaluate the effectiveness of your insetting initiatives and provide recommendations for continuous improvement.


So remember, be a Leader in the sustainability space, Not a Carbon Laggard.


The message is clear: carbon offsetting alone is no longer enough. Consumers, investors, and regulators want to see tangible, credible reductions. By investing in insetting and aligning offsetting efforts with your values, your business can stand out as a leader in sustainability and climate action as well as promoting your ethical values as an organisation which is becoming more and more valuable.


The path to net-zero isn’t a quick fix. It’s a journey that requires action at every level—from sourcing and operations to partnering with the right projects. So, think inside and outside the carbon box. The planet—and your business—will be better for it.


Thanks for reading!


Louise

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