Reduce Supply Chain Emissions Through Insetting
Environmental Defense Fund
Taking action to reduce emissions within your supply chain – a practice known as insetting – is a critical path towards reducing your company’s carbon footprint. By investing in activities that directly reduce emissions or increase carbon storage within your company's value chain, you are directly addressing climate change.
Carbon insetting describes a company’s efforts to reduce carbon emissions by investing in activities that remove or store carbon within the company’s own supply chain. This differs from carbon offsetting, which involves purchasing credits to reduce carbon emissions outside of a company’s direct control.1 Investing in internal supply chain solutions is an important part of reducing your company’s carbon footprint.
These activities can take many forms, but often focus on nature-based solutions. Examples include investing in on-site renewable energy, using regenerative agriculture practices, and reforesting lands. These activities can also provide long-term benefits for the environment and communities, such as increased carbon storage in soil and forests, improved water quality, and enhanced biodiversity.
Reducing emissions within your supply chain can create several benefits for your company:
- It can help you improve the resilience of your supply chain and reduce the risks associated with climate change. For example, by investing in renewable energy sources or energy efficiency measures, you can reduce your reliance on fossil fuels and ensure a more stable and secure energy supply.
- It can generate cost savings for your business.
- It can create positive social and environmental impacts, such as improving soil health, enhancing biodiversity, and supporting local communities.
- It can help you meet your sustainability goals and allows you to demonstrate direct action your company is taking within its operations to reduce its impacts.
To identify opportunities to reduce emissions in your company’s supply chain, the first step is to assess your company’s carbon footprint. This involves measuring the total emissions from your company’s operations and supply chain. External agencies can assist with this analysis and help identify the biggest sources of emissions. Once you have a clear picture of your carbon footprint, you can identify opportunities for internal investments within your operations and value chain. This may involve working with suppliers to implement sustainable practices or supporting reforestation efforts. A carbon insetting partner can help identify the most effective internal investment activities.
Internal supply chain initiatives can take many forms, and the specific activities you choose will depend on your company’s needs, objectives, and capabilities. Here are a few examples that you might consider:
- Plant trees on your company’s own land or working with suppliers to plant trees in their land: Trees absorb carbon dioxide from the atmosphere as they grow, making reforestation and afforestation efforts an effective way to sequester carbon within your supply chain.
- Invest in regenerative agriculture practices: Certain farming practices, such as agroforestry and no-till farming, can sequester carbon in the soil. By investing in regenerative agriculture practices within your supply chain, you can help to reduce the emissions associated with your products.
- Use renewable energy in your company’s supply chain: By encouraging your company and its suppliers to build renewable energy, you can help to reduce the emissions associated with your supply chain.