Net zero emissions are hardly achievable without compensation – but not all compensation is the same. Beyond traditional offsetting, where emissions are balanced through external projects, there is a more impactful alternative: insetting. With insetting, companies invest directly in their own value chain to reduce emissions where they actually occur. Climate action thus becomes an integral part of the business model – credible, measurable, and future-proof. Discover why insetting is the next step towards true climate responsibility.
Insetting is a climate action measure in which companies reduce emissions directly within their own value chain – for example through sustainable raw material production, low-emission transport routes, or the promotion of regenerative farming methods. Unlike traditional offsetting, insetting is not just about compensation; it is about actively taking responsibility.
The primary focus is on Scope 3 emissions, which often account for the largest share of a company’s carbon footprint and arise along the supply chain. This is where insetting comes in: companies maintain control over the measures, strengthen partnerships, and create true transparency. For achieving net zero goals, this is decisive – because without deep reductions in Scope 3 emissions, climate neutrality remains out of reach.
Offsetting, by contrast, compensates for emissions through external climate projects such as reforestation or renewable energy development. These do not directly reduce a company’s emissions but balance them through purchased carbon credits. While offsetting can serve as a short-term solution, insetting drives long-term structural improvements.
Yes, insetting is generally more costly than offsetting – but that higher price reflects greater, long-term value. While offsetting often supports relatively inexpensive projects abroad (e.g. reforestation or methane reduction), insetting directs investment into the company’s own value chain.
That means companies reduce emissions where they themselves can act – e.g. through more sustainable farming, climate-friendly logistics, or energy efficiency improvements with suppliers.
This proximity makes insetting more credible and simultaneously strengthens the company’s resilience. Measures improve the climate footprint over the long term, reinforce supplier relationships, and foster innovation. Insetting thus creates environmental as well as strategic advantages.
Furthermore, insetting projects are often easier to measure and verify. Customer and investor trust grows when climate action is transparent and traceable. Offsetting, in contrast, risks being perceived as “buying indulgences” if emissions are merely compensated instead of being reduced.
In short: Yes, insetting is usually more expensive. But it is also more valuable, effective, and sustainable. Companies serious about climate responsibility are increasingly choosing insetting – not despite, but because of, its higher costs.
Despite these hurdles, insetting offers long-term advantages for the environment, business, and reputation. Success requires clear strategies, strong partnerships, and robust monitoring.
Insetting is not greenwashing – quite the opposite. It represents real, credible climate action. The key difference to offsetting is that insetting is embedded in a company’s own processes.
Companies invest in climate measures along their own value chain – e.g. with suppliers, in production, or in logistics. This gives them control over implementation, quality, and impact.
Offsetting, by contrast, can lead to greenwashing accusations if projects are distant, opaque, or poorly verified. Insetting demonstrates that a company takes responsibility where it has direct influence. It is not about compensating emissions, but about actively reducing them – making insetting a credible path toward genuine sustainability.
What distinguishes insetting from other climate measures?
Insetting focuses on sustainable actions within the value chain, unlike many other measures (such as offsetting) that rely on external compensation. Instead of simply buying certificates, insetting directly improves processes, supply chains, and production methods – achieving long-term CO₂ reductions.
Which industries is insetting relevant for?
Is insetting suitable for SMEs?
Yes. While large companies often pursue bigger projects, SMEs can integrate insetting via smaller initiatives – e.g. sustainable sourcing or energy efficiency. Increasingly, funding programs and partnerships are available to support SMEs.
What is the definition of insetting?
The Science-Based Targets initiative defines insetting as: "Insetting can be used to describe mitigation projects that are wholly contained within a scope 3 supply chain boundary of a company, a project partially within their scope 3 supply chain boundary, and a project adjacent to a supply chain boundary." SBTi further states that "work is ongoing to standardise the definition of insetting and a clear accounting methodology".
Which certifications exist?
Today, there is no uniform approach for insetting; however, the Science-Based Targets initiative states that insetting can be used to offset scope 3 emissions and insetting projects are assessed on a case-by-case basis. Most companies doing insetting projects today, use established standards such as Gold Standard, Cercabono, International Carbon Registry, and others. However, these standards do not offer specifically insetting certifications, rather carbon certifications.
Can insetting reduce Scope 3 emissions?
Yes. By targeting raw material production, transport, packaging, and more, insetting can significantly cut Scope 3 emissions – improving the company’s full climate balance.
Insetting is an effective and sustainable way to reach climate goals while making supply chains more resilient and efficient. Companies that adopt insetting benefit from a stronger brand, regulatory security, and economic advantages.
While offsetting may seem easier in the short term, insetting is the more sustainable and future-proof strategy for companies committed to real climate action.
OXO Earth develops carbon removal projects with German forest owners and helps companies to act on their responsibility with credible negative emissions.
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