The carbon insetting definition, at its simplest, is this: rather than compensating for emissions by funding projects outside a company's value chain, insetting directs investment into climate and nature projects within that same value chain. If a food company sources cacao from smallholder farmers in West Africa, a carbon insetting programme might fund agroforestry or regenerative agriculture practices on those very farms, addressing the emissions the company is responsible for at their source. This is not merely a semantic difference from carbon offsetting. It is a structural one. Offsetting treats emissions as an accounting problem—you emit here, you compensate there. Insetting treats emissions as a supply chain problem, and it solves them where they actually arise. The result is that the environmental and social benefits—healthier soil, diversified crop systems, improved livelihoods for farming communities—flow directly to the ecosystems and communities the company depends on. Crucially, the emissions reductions and removals generated through insetting can, in some frameworks, be applied directly toward a company's own Scope 3 emissions accounting, giving insetting a practical reporting dimension that extends well beyond philosophy, and one that simultaneously strengthens the ecological and commercial health of the supply chain itself.
The carbon insetting vs. carbon offsetting debate is often framed as a binary, but in practice the two mechanisms serve different purposes and need not be mutually exclusive. A company may use insetting to decarbonize its core supply chain while selectively using high-quality offsets to address residual emissions it cannot yet eliminate, making the strategic question not which to choose, but how to deploy each appropriately.
Where the investment goes
In carbon offsetting, funds flow to projects that are geographically and operationally disconnected from the buyer's business, delivering carbon reduction without changing the supply chain itself. In carbon insetting, the investment is embedded inside the value chain. A coffee roaster funding shade-tree cultivation on the farms it sources from, or a textile company supporting sustainable farming practices among its cotton growers, is engaging in insetting. The emissions reductions happen in the same places that produce the company's goods, and in land-use contexts, the investment can generate carbon removals as well as reductions.
Credibility and verification
Both mechanisms require rigorous measurements to be credible. However, insetting has historically operated with less standardization than offsetting, which is governed by frameworks such as Verra’s Verified Carbon Standard (VCS) or Gold Standard. Carbon insetting standards are still maturing, but the landscape is evolving rapidly. The Insetting Programme (TIP), one of the earliest bodies to develop insetting frameworks, alongside the SBTi, and the Integrity Council for the Voluntary Carbon Market (ICVCM)—the successor body to the Taskforce on Scaling Voluntary Carbon Markets (TSVCM)—have all been working to address how insetting should be measured, verified, and reported. This is particularly relevant for Scope 3 emissions, which cover indirect emissions across a company's entire value chain, both upstream through the supply chain and downstream through product use and end of life.
Insetting and offsetting as complements
The most sophisticated corporate climate strategies are beginning to treat insetting and offsetting not as rivals but as complementary tools. Insetting addresses the structural emissions embedded in a company's value chain—the harder, more transformative work. Offsetting, where high-integrity credits are used, can address what remains. Together, they form a more complete and defensible path toward credible net-zero commitments than either mechanism can deliver alone.
For most consumer-facing businesses, the majority of their carbon footprint does not sit in their own factories or offices. It sits in Scope 3 emissions—the upstream and downstream activities that fall outside direct operational control. According to CDP, Scope 3 emissions account for an average of three-quarters (75%) of a company's total carbon footprint, and in some sectors, such as financial services, this share can approach virtually 100%. The GHG Protocol similarly recognizes Scope 3 as typically the largest source of emissions for most businesses. Agricultural supply chains are among the most emissions-intensive contributors within that Scope 3 footprint. According to the IPCC's Sixth Assessment Report (AR6), agriculture, forestry, and other land use (AFOLU) accounted for approximately 13-21% of total net anthropogenic GHG emissions over the 2010-2019 period, with the single-year figure for 2019 reaching approximately 22% depending on the methodology applied. Deforestation, soil degradation, synthetic fertilizer use, and methane from livestock all contribute substantially to corporate carbon footprints. Yet they are notoriously difficult to address through conventional approaches, occurring as they do across thousands of independent suppliers outside a company's direct operational control. This is precisely where insetting makes its strongest case. By investing in practices such as agroforestry (the integration of trees with crops and livestock) or regenerative agriculture (which rebuilds soil health, sequesters carbon, reduces reliance on synthetic inputs, and supports biodiversity through practices such as no-till farming and cover cropping), companies can begin to address Scope 3 emissions at their source rather than papering over them with external credits alone.
The practical applications of carbon insetting examples vary considerably by sector, which underscores its versatility as a tool for corporate sustainability. Voluntary agricultural carbon markets and insetting programs have expanded rapidly since the mid-2010s, driven largely by food and agriculture companies seeking to decarbonize their supply chains. The following examples show what this looks like when theory meets practice.
Nespresso’s AAA Sustainable Quality Programme, co-developed with the Rainforest Alliance in 2003, is one of the most established insetting programmes in the food and beverage sector. Starting with 300 farmers in Costa Rica, the programme has grown to cover more than 150,000 farmers across 18 countries, implementing regenerative agriculture and agroforestry practices, including shade-tree cultivation and composting directly within Nespresso’s coffee supply chain. Since 2014, more than ten million trees have been planted across AAA landscapes, and over CHF 363 million has been invested in technical assistance, farmer premiums, and community infrastructure. A 2013 study by the Centre for Regional Coffee and Business Studies (CRECE) across 1,000 Colombian AAA farmers found their income levels were 46% higher than those of non-programme farmers.
Moving from food and beverage to luxury fashion, Kering, the group behind Gucci and Saint Laurent, launched the Regenerative Fund for Nature in partnership with Conservation International to convert farmland and rangelands within its fashion supply chains covering materials such as leather, cashmere, cotton, and wool to regenerative practices across 17 countries. By mid-2025, Kering had surpassed its target of one million hectares converted, with the enrolled area reaching 1.1 million hectares, according to Women's Wear Daily (WWD). Validated projects include a 342,000-hectare cashmere rangeland programme in Mongolia and a 300,000-hectare sheep wool and leather project in Patagonia, Argentina.
In the food ingredients sector—and demonstrating that credible insetting is achievable even at pilot scale—Boortmalt, the world’s leading malted barley provider, partnered with BASF through its Global Carbon Farming Program to implement cover cropping practices among barley farmers in Ireland. The results, drawn from a pilot involving 12 participating farmers, were independently verified by SustainCERT to Verra’s VM0042 Improved Agricultural Land Management standard and announced in March 2025. The results show average savings of 2.3 tonnes of CO₂e per hectare, a reduction in per-hectare GHG emissions of nearly 90%. This made Boortmalt and BASF the first companies in Europe to achieve Verra’s standard of verification specifically through carbon insetting, according to BASF and Trellis.
One of the most legitimate criticisms of carbon insetting is that, unlike offsetting markets, it has lacked consistent methodologies for quantifying and reporting the emissions reductions it generates. Without agreed carbon insetting standards, companies risk making claims that are difficult to verify or, worse, that constitute greenwashing. The broader voluntary carbon credit market is projected to grow significantly over the coming decade, with estimates varying considerably across research firms and market valuations for 2024 ranging from USD 1.7 billion to over USD 3 billion depending on methodology. Yet insetting within this market remains comparatively underrepresented and under-standardized. This is changing. Several industry-led and multi-stakeholder initiatives are converging on a more consistent set of measurement and verification frameworks. One of the most significant is Verra's Scope 3 Standard (S3S) Programme. Verra, the world's largest carbon crediting organization, with over 2,300 registered projects globally, formally launched its S3S development in late 2023 and has been running pilot projects since August 2024. Originally targeted for launch in 2025, Version 1.0 of the programme remains under development, with public consultation on preliminary programme documents still ongoing as of the time of writing, according to Verra and ClearBlue Markets. Alongside S3S, the ICVCM has published its Core Carbon Principles (CCPs), a set of threshold standards designed to ensure that carbon credits, including those generated through insetting, meet baseline integrity requirements for additionality, permanence, and independent verification. Together, these developments signal that the voluntary carbon market is moving toward the kind of methodological rigor that insetting has historically lacked. Most important, companies do not need to wait for a universal standard before acting credibly. The most defensible approach today, and one that will remain relevant even as frameworks like S3S and SBTi’s Forest, Land and Agriculture Guidance (FLAG) mature, is to document supply chain baselines rigorously, engage independent third-party verifiers, and align reporting with the closest available methodological proxies. These currently include Verra’s VM0042 protocol, the GHG Protocol’s Land Sector and Removals Standard, and FLAG—frameworks that together cover farm-level emissions, corporate land accounting, and science-based target-setting for land-use sectors. The Boortmalt–BASF programme demonstrated exactly this: credible, Verra-verified insetting is achievable within the current standards landscape, provided the measurement, verification, and traceability infrastructure—meaning the systems that track emissions data from farm to final product—is in place from the outset.
The standards progress described in the previous section is already beginning to rebuild market confidence. According to the Global Market Insights, the voluntary agriculture carbon credit market, which is a close proxy for insetting investment in food and land-use supply chains, was valued at USD 36.1 million in 2024, down from USD 84.9 million in 2023. This contraction reflects the heightened scrutiny of carbon credit integrity that has characterized the voluntary carbon market since 2022, as buyers and standard-setters alike demand greater rigor around additionality, permanence, and third-party verification. Despite this contraction, projections suggest the market could reach USD 648 million by 2034 at a CAGR of 31.9%, as standardization efforts and corporate demand for supply chain decarbonization gather pace. That projected recovery is not merely a market statistic; it represents the scale of private investment that could flow into regenerative land and agricultural systems at a scale and speed that public finance alone cannot match. It supports the transition to regenerative land management, funds farmer education and capacity building as demonstrated by programmes like Nespresso's AAA (investing over CHF 363 million in technical assistance and community infrastructure across its supply chain), and embeds decarbonization into commercial relationships rather than treating it as a separate philanthropic exercise, making it one of the few tools available that simultaneously serves corporate, environmental, and development objectives through the UN Sustainable Development Goals around food security, biodiversity, rural livelihoods, and climate resilience.
The ambition is clear, but ambition without infrastructure is just intention. Cognitud's environmental consultants address carbon insetting's most persistent operational barrier—how to measure what is actually happening across a complex, multi-tiered supply chain and turn those measurements into verifiable, reportable outcomes. We enable companies to map supply chains with granularity, collect primary environmental data from suppliers, and track value chain sustainability programmes over time, replacing sector-average estimates with evidence from the farms, processors, and manufacturers that make up their upstream footprint. Critically, Cognitud also helps align insetting activities with the reporting frameworks that now govern corporate disclosure from the SBTi to the CSRD, turning carbon neutrality commitments into documented, auditable practice. The result is carbon insetting that doesn't just sound credible; it demonstrably is.
Shipra Jain
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Carbon insetting is a climate strategy where companies invest in emissions reduction or removal projects within their own value chain, rather than funding projects elsewhere. It focuses on addressing emissions at their source—such as farms, forests, or suppliers that directly contribute to a company’s footprint—making it a supply chain–embedded approach to decarbonization.
Carbon insetting is important because it directly targets Scope 3 emissions, which often make up the majority of a company’s carbon footprint. By acting within the value chain, it delivers measurable environmental impact while also strengthening supply chain resilience, improving ecosystems, and supporting supplier communities.
Carbon insetting works by channeling investment into climate-positive practices within a company’s supply chain, such as regenerative agriculture or agroforestry. These interventions reduce or remove emissions at the source, and their impact is measured, verified, and in some cases accounted for within the company’s Scope 3 emissions reporting.
Carbon insetting projects are initiatives implemented within a company’s value chain to reduce or remove emissions, often in land-use systems. Examples include agroforestry on coffee farms, regenerative practices in cotton or wool production, or cover cropping in agricultural supply chains, all of which generate both environmental and supply chain benefits.
Carbon insetting is not inherently better than carbon offsetting, but it serves a more transformative role by addressing emissions within the value chain itself. The most effective strategies use insetting to reduce core emissions and complement it with high-quality offsets to manage residual emissions that cannot yet be eliminated.
