Corporate Offsetting Is Never Enough


In the race to zero, companies are racing to invest in carbon offsetting schemes to mitigate their greenhouse gas emissions. More progressive organisations, however, are heading in a different direction.


Carbon offset schemes allow companies to invest in environmental projects around the world in order to balance their own carbon footprints and as an effortless way to get closer to net zero emissions. However, there has always been the issue of whether or not the carbon sequestration or savings would have happened anyway – and hence if the offsets are truly incremental. At the same time, offsetting can be seen irresponsibly by some as a licence to continue with ‘business as usual’ locally and to buy offsets that take place elsewhere to make progress on reducing their emissions.

Carbon insetting is not as familiar to most people as carbon offsetting and yet for many businesses and organisations it is the missing part of their net zero strategy. The crucial difference is that whereas offsetting happens in an area over which the business has limited control, insetting always involves a strong connection with the business. For example, while traditional offsetting could involve choosing a renewables project to invest in, carbon insetting would involve a business setting up its own renewables project on site or investing in that of a supplier.

From the company’s perspective, insetting has its downsides as it requires more work to implement and calculating the emissions reduction is not as simple as buying carbon credits for however many tonnes of carbon the company wants to offset. Professor Ian Thomson, director of Lloyds Banking Group Centre for Responsible Business, adds:

From a ‘carbon accounting’ perspective, it’s very important to accurately and comprehensively measure the carbon that needs to be inset or offset. Get this number wrong and even insetting will add to climate change. At the same time, companies must be careful not to double-count carbon savings by labelling the same project as both carbon reduction and an offset scheme.

Proponents of insetting highlight that the added engagement leads to a much better understanding of company operations and more direct responsibility for their emissions, as well as surety that the reductions are real. There’s another big advantage. Insetting not only gives a company more control and oversight: the budget for reducing carbon stays within the company’s own value chain rather than going to a separate organisation. Working more closely with a supplier to cut their carbon emissions, for example, strengthens the company’s supply chain and builds stronger relationships between partner organisations.


The race to zero is also a race to resilience. Until recently, the focus has predominantly been on climate change mitigation – on reducing the sources or enhancing the sinks of greenhouse gases. As such, examples of company mitigation strategies might include adopting renewable energy sources like solar, wind and small hydro; retrofitting offices and factories to make them more energy efficient; promoting more sustainable transport services for people to get to work.

As we increasingly see and feel the impacts of extreme weather events, there is an urgent need for climate change adaptation – for adjusting to actual or expected climate change and its potentially devastating effects. Accordingly, corporate adaptation strategies are different and might include using scarce water resources more efficiently; adapting new buildings to future climate conditions and extreme weather events; building flood defences where current facilities are exposed; developing drought-tolerant crops to maintain yields; setting aside land corridors to help species migrate.

Although there is some overlap between the two, adaptation is not so much about the climate and the environment as it is about how we adapt as a society and change the ways we live and work. If mitigation addresses the causes of climate change, then adaptation addresses its impacts. But they are not mutually exclusive, as Professor Thomson points out:

Adaptation has ‘carbon consequences’ too, much like everything we do. So, when thinking about tackling carbon emissions it’s not necessarily a forced choice between mitigation or adaptation – you can do both at the same time. Of course, the best form of adaptation is to avoid emitting greenhouse gases in the first place.


Insetting involves companies taking more in-house responsibility for their emissions and has wider benefits for the company than paying a separate organisation to reduce or absorb their emissions. Adaptation involves companies taking more place-based responsibility for the current or anticipated impact of climate change on their operations, so they can continue to do business in our climate-altered world. In both cases, progressive thinking and enlightened self-interest will ensure that these shifting responsibilities not only help companies meet their emissions reduction targets but also realise other beneficial changes for the wider community.

Is your business an insetting or adaptation pioneer? Please share your story with Carbon Copy so others can learn from you and follow your lead!

Photo by Jose Antonio Gallego Vázquez on Unsplash

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