Companies Are Turning to Carbon Insetting: Supply Chain Emission Reductions for 2030 Targets

Aug 27, 2025

As the 2030 climate targets rapidly approach, companies are adopting new strategies to reduce their carbon footprints. Carbon insetting, particularly focused on reducing supply chain emissions, is gaining increasing attention. According to experts, 70–80% of large brands’ carbon footprints come from supply chain emissions, and they must achieve significant reductions in this area by 2030. So, what exactly is carbon insetting, how does it differ from traditional offsetting, and why are companies embracing it? In this study, we examine the concept of carbon insetting, its practical applications, and data-driven success criteria—explained in a technically solid yet accessible manner.

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What Is Carbon Insetting? How Is It Different from Offsetting?

Carbon insetting means a company invests in projects within its own value chain that reduce greenhouse gas emissions. In other words, instead of buying carbon credits from an external project (offset) to compensate for its emissions, the company takes direct emission-reducing steps within its suppliers or areas of operation. This may involve nature-based solutions such as tree planting, agroforestry, renewable energy use, or regenerative agriculture. For example, a food company can finance the transition to regenerative agriculture in the farms it sources from, enabling the soil to store more carbon and reducing process-related emissions.

In offsetting, by contrast, a company balances the emissions it cannot reduce in its own operations by purchasing carbon credits, usually from projects elsewhere in the world. These credits often come from external projects such as forest conservation or the construction of renewable energy plants. While offsetting relies largely on projects outside the business, insetting focuses on reductions within the business’s own value chain. Put another way, the offset mechanism gives companies the opportunity to appear “carbon neutral” by “paying others to reduce on their behalf,” while the insetting approach is based on companies “doing good work themselves” to reduce emissions directly in their own supply chains. In this respect, insetting is seen as an integrated, lasting, and holistic sustainability move within company operations.

“Focusing on doing more good rather than doing less harm” — with these words the World Economic Forum summarizes carbon insetting, emphasizing that offsetting alone is not sufficient and that companies must make their own value chains nature-positive. The insetting approach moves companies away from merely balancing their emissions externally and toward making reductions internally.

Why Are Companies Turning to Insetting? 2030 Targets and Strategic Importance

The biggest factor behind the rise of carbon insetting is that global climate targets have become much closer and more concrete. The Paris Agreement and scientific warnings make it mandatory to cut emissions by half by 2030. Initiatives such as the Science Based Targets initiative are compelling companies to set science-based reduction targets for 2030, and in many sectors the main challenge is concentrated in Scope 3 (supply chain) emissions. Global brands recognize they can no longer rely on traditional offset credits to reduce the majority of their footprints.

Criticism of carbon offset projects is another reason pushing companies toward insetting. For years, the offset mechanism — often perceived as “keep polluting, pay to clean it up elsewhere” — has been criticized; some experts argue this kept companies from making real reductions in their own operations. Recently, many firms have concluded that instead of buying questionable credits merely for a “carbon-neutral” label, making tangible reductions directly within their own spheres of influence is the smarter choice for reputation and risk management.

Add to this the motivations of resilience and resource security. Especially in sectors like food, agriculture, and textiles, companies are realizing that their suppliers’ ability to combat climate change actually serves their own long-term business interests. As Danone’s sustainability executive Henri Bruxelles warns: “As a food company, creating a positive impact on nature is not only a matter of responsibility but also of resilience and competitiveness. If you don’t act now, within five years you will face multiple business risks.” Indeed, from soil fertility to water resources, many environmental factors are critical elements that will affect companies’ future supply capacity.

In short, as 2030 approaches, companies are being driven toward insetting by both regulatory pressure and business continuity considerations. For example, Nestlé aims to produce 50% of its raw materials using regenerative agriculture methods by 2030 and to this end is supporting 15 different land-based insetting initiatives worldwide. Such steps show that value chain–based carbon reduction has become the core strategy for companies to achieve their net-zero and beyond targets by 2030.

How to Build the Data Architecture for Successful Insetting Projects

For insetting projects to truly work in the field and produce reliable results, the most critical need is to establish a strong data architecture. Because insetting occurs in farms, suppliers, or logistics networks that are outside the company’s direct control, the climate impact of these actions cannot be verified if sound data cannot be collected from these areas. Experts therefore stress the necessity of an integrated data infrastructure that supports measurement, reporting, and verification (MRV). According to guidance published by the WBCSD — the World Business Council for Sustainable Development — to calculate the effects of practice changes in agri-food value chains, companies must continuously measure, report, and verify critical sustainability metrics that extend across the entire value chain.

What does such a data architecture look like in practice? First, systems must be established that enable data collection at the field level. For example, in an insetting project aimed at increasing soil carbon, data such as soil analysis results, applied agricultural techniques, and fertilizer use should be collected regularly from farmers. New digital tools are coming into play here: in 2023, companies such as AgriWebb (farm management software for livestock) and Klim (a climate-tech platform promoting regenerative agriculture) offered solutions that help companies collect data from farmers in their supply chains and calculate carbon impact, raising millions of dollars in investment. Such software digitally records actions in the field (e.g., pasture management, adding organic matter to soil) and links them to the company’s emissions inventory.

The second step is integrating the collected data into a central platform. Companies establish data infrastructures that bring together the diverse data streams (sensor measurements, satellite imagery, farmer declarations, etc.) coming from insetting projects. This infrastructure should host calculation models that process raw data into emission reductions. For example, algorithms that calculate how much carbon is stored by added soil organic matter, or tools that calculate the emission reductions provided by biofuels compared with fossil fuels in the supply chain, should be part of this architecture. Here, artificial intelligence and advanced analytics can step in; AI-based systems are increasingly used to process large datasets faster and to forecast trends. Platforms like Bluearf are developing AI-supported solutions so that companies can analyze their carbon data end to end. Bluearf provides businesses with an AI-powered platform on which they can calculate and analyze their carbon footprints in one place, aiming to solve the big-data problem in this field.

The backbone of the data architecture is verification and traceability mechanisms. To credibly claim “I reduced X tons of CO₂” within insetting, a company must have reliable data proving this. Andrew Nobrega from the international consultancy PUR Projet notes that when brands initially invest in their supply chains for carbon reduction purposes, the same investment also brings co-benefits such as water savings, biodiversity, and increased farmer income — showing that data creates value in multiple dimensions, not just for carbon. However, all these benefits must be presented transparently. To increase transparency, some pioneering companies are converting data received from suppliers into blockchain-based digital certificates. For example, Japanese shipping company MOL converts the environmental gains of voyages using low-carbon fuels into Environmental Attribute Certificates (EACs) and offers them to customers. Each of these digital certificates includes approximately 60 data points such as the fuel type, the amount of emissions avoided, and the independent verifying body; and they are immutably recorded via blockchain to prevent double counting. Thus, data architecture involves not only collecting and analyzing data, but also storing it securely and sharing it with relevant stakeholders in a trustworthy way.

Finally, experts emphasize the importance of a supplier-centric data approach. Nikol Ostianova of the International Insetting Platform’s technical committee recommends “collecting data by placing the supplier at the center” to ensure reductions achieved in the supply chain are properly attributed. Because ultimately, the ones making the changes in the field are farmers or producers; the real data they provide becomes meaningful when it feeds into the company’s emissions accounting. In this model, the supplier presents the data on the improvements they have made to the company, and the company records this verified data in its Scope 3 inventory. In this way, both the occurrence of emission reductions is ensured, and claims by multiple actors for the same reduction (double counting) are prevented. At this point, supplier monitoring and action platforms that all stakeholders in the supply chain can easily use have a major role to play. For large institutions with thousands of suppliers, it is not possible to collect this data with manual workloads.

Example Application Areas of Insetting and Impact Calculation Methods Carbon insetting allows companies to develop innovative projects in many different areas of activity. From carbon sequestration in soil to fertilizer management, from logistics optimization to energy use, a wide range of data-supported applications can be seen. Here are some key insetting areas and information on how they are calculated:

Soil Organic Carbon (Agriculture and Land Use): Soil is a massive carbon sink — indeed, agricultural soils are among the largest carbon sinks in the world. For this reason, many insetting projects aim to increase carbon sequestration in farmland. For example, Nespresso, a Nestlé subsidiary, has implemented regenerative agricultural practices in its coffee supply chain. By planting shade-providing trees in coffee plantations, it has both helped regulate the ecosystem, increased water retention capacity and soil fertility, and enabled carbon to be stored in soil and biomass. This initiative tracks changes in the soil’s organic carbon through field measurements; periodic soil analyses and satellite images are used to calculate how much CO₂ is sequestered. The data also shows that new income opportunities are created for farmers (e.g., sales of fruit and timber from planted trees) — thus demonstrating the social impact alongside the carbon benefit of the insetting project.

Nitrogen Management (Fertilizers and Agricultural Emissions): Nitrogen-based fertilizers used in agriculture lead to emissions of nitrous oxide (N₂O), a potent greenhouse gas. In the United States, agricultural soils are responsible for 78% of national N₂O emissions, and the primary source is synthetic fertilizer use. Through insetting, some food companies reduce these emissions by improving their suppliers’ fertilization practices. For example, the firm 3Degrees runs programs for clients that optimize fertilizer use with the “4R principles” (Right source, Right rate, Right time, Right place) and promote enhanced-efficiency fertilizers. This yields less nitrogen loss at the field level and lower N₂O emissions. To calculate impact, farmer-level fertilizer application data and soil measurements are collected; then emission reductions are calculated using IPCC emission factors or project-specific models by comparing them with a “what would have happened otherwise” scenario. Projects are verified under standards such as the Climate Action Reserve to confirm that the stated amount of emission reduction is truly achieved.

Logistics and Transportation: The transport of products in the supply chain results in significant fossil fuel consumption and thus carbon emissions. The insetting approach also comes into play in logistics by, for example, switching transport fuels to low-carbon alternatives or optimizing routes. However, it may not be easy for a company to convert its entire transport operations to electric vehicles or biofuels on its own. This is where the so-called “book-and-claim” system comes into play. Book-and-claim is based on sharing the emission reduction achieved by using low-carbon fuel through certificates, even if the fuel is not physically used in the same supply chain. As in the MOL example above, when a shipping company uses biofuel on certain voyages, the resulting CO₂ savings can be allocated to cargo owners as EAC certificates. In other words, when your company ships a container by sea, you can pay a surcharge to encourage biofuel use for that voyage and reflect the resulting carbon reduction in your own inventory. This reduction amount is calculated based on fuel consumption data and the fuel’s life-cycle analysis and is specified in the certificate. Since each certificate is reviewed and approved by independent verifiers, your company can confidently report this Scope 3 emission reduction. Similarly, in road transport, logistics providers have begun offering HVO (hydrotreated vegetable oil) fuel options to customers, documenting the switch from fossil diesel to biofuel and sharing the associated emission savings. As a result, insetting projects in logistics are uniting companies and carriers around a common climate goal through transparent data sharing.

International Guidelines: Gold Standard, Value Change Initiative, ISO 14064-2, GHG Protocol LSR…

Because insetting is still a relatively new approach, it is crucial for companies to consult international guidelines and standards to take the right steps. Fortunately, in recent years several institutions have begun to provide methodological guidance on this topic:

Gold Standard & Value Change Initiative (VCI): Known as a quality benchmark in carbon markets, Gold Standard is leading the development of rules for accounting for value chain–internal (Scope 3) reduction activities through the Value Change Initiative. For example, to overcome traceability problems in supply chains, Gold Standard and VCI introduced the concept of the “supply shed.” A supply shed allows a company to consider all producers from whom it indirectly or directly sources in a particular geographical region as a group. If a company buys coffee beans solely from France and cannot track individual farmers, it can treat all of France as a supply shed and count carbon-reducing projects implemented with producers in this shed as insetting. This approach offers an interim solution in cases of data scarcity, allowing a company to own climate projects in regions to which it is geographically connected. However, it should be noted that it has not yet been fully approved by the GHG Protocol (work continues). Nevertheless, such methods developed under the leadership of Gold Standard are innovations that increase the accountability of insetting projects. Gold Standard is also working on guidance on how to share reduction claims in landscape-scale projects conducted jointly by multiple stakeholders. Meanwhile, the Value Change Initiative serves as a learning platform that brings together various companies to co-develop practical solutions for Scope 3 emission reductions and removals, including accounting, reporting, and claim management.

ISO 14064-2 (Project-Level Carbon Standard): The ISO 14064 series, published by the International Organization for Standardization, provides a globally accepted framework for measuring and reporting greenhouse gas emissions. Part 2 of the series, ISO 14064-2, provides guidance specifically for calculating, monitoring, and reporting project-based greenhouse gas reduction or removal projects. Since insetting projects are often essentially carbon projects, ISO 14064-2 principles set the success criteria in this area. The standard describes which methodologies will be used within the scope of the project, how uncertainties will be addressed, and how reporting will be carried out transparently. For example, if a company designs an afforestation project in its supply chain according to ISO 14064-2, every step — from the initial carbon stock to how annual emission reductions will be monitored — is defined. Moreover, thanks to ISO 14064-3, the results obtained from this project can be verified by third parties. In short, ISO standards are a universal language for implementing insetting transparently, comparably, and reliably.

GHG Protocol LSR (Land Sector and Removals Guidance): The Greenhouse Gas Protocol, which forms the basis of global GHG accounting, has been working in recent years on the Land Sector and Removals Guidance. This guidance, which is still in draft and planned for publication in 2025, aims to explain how companies should include emissions and carbon removals in forests, agricultural land, soil, and biogenic products into their GHG inventories. Since many insetting projects are land-based — such as forest management, landscape restoration, and soil carbon sequestration — when this guidance comes into effect it will provide a roadmap for companies. For example, if a company runs a carbon farming program with its suppliers, the GHG Protocol LSR will clarify how to add CO₂ removals from this program to the corporate inventory and what to pay attention to. For now, the draft guidance covers topics such as land-use change, carbon removals and storage, and biogenic products, aiming to ensure accounting that aligns with companies’ climate targets (for example, SBTi’s FLAG — Forest, Land and Agriculture — targets). When this guidance is completed, the question for companies doing insetting — “Under what conditions can I count these reductions in my own inventory?” — will largely be answered.

Other Initiatives and Standards: The Science Based Targets initiative (SBTi) has also provided direction for companies to focus on value chain emissions. For example, SBTi’s Forest, Land and Agriculture (FLAG) guidance indicates how much emission reduction is needed in these sectors, while Beyond Value Chain Mitigation reports describe how companies should approach investments outside the value chain. Even so, insetting is not yet fully embedded in existing standards; therefore new standardization efforts have begun. As of 2024, the leading carbon standard setter Verra is developing a Scope 3 emission reduction standard, and the UK-based Social Carbon organization is working on methods to certify in-house projects. These developments indicate that in the near future, insetting projects — like offset projects — could be certified under independent standards. Finally, SustainCERT, operating under Gold Standard, announced that it is developing a digital platform to verify supply chain emission reductions and corresponding “Impact Units.” The goal is to track and record reductions in supply chains to prevent double counting between companies and to make co-claiming mechanisms in joint projects fair. In short, international guidance and initiatives are working to resolve the methodological uncertainties of carbon insetting and to establish a widely accepted framework.

MRV, Uncertainty Calculation, and Claim Management: A Simple Explanation Putting technical details aside, the key to the credibility of carbon insetting projects is a process summarized by three letters: MRV — Measurement, Reporting, Verification. Put simply: first, the emission reduction achieved within the scope of the project must be measured (by collecting data in the field). Then this data must be reported in accordance with certain standards and shared with relevant parties. Finally, independent experts must review and verify these data and calculations. MRV reveals whether carbon projects “do what they say they do.” In insetting projects — company-internal in nature — MRV is especially important, because a company is claiming a reduction that did not occur directly within its own operations. Therefore, every climate-friendly practice implemented within the supply chain should be monitored, reported, and approved by third parties as quantitatively as possible. For example, if a dairy company claims it has reduced methane emissions by improving its farmers’ manure management practices, the number of farmers involved, what exactly they did, the total emission reduction achieved, and the calculation method should be clearly stated in the report; and an independent auditor should examine and approve these. Data- and evidence-based decision-making is the most reliable way to make climate action effective.

As with any measurement, there is also an element of uncertainty in carbon reduction projects. Because natural systems are complex, it is nearly impossible to know exactly how many tons of CO₂ a forest will absorb over 10 years — but an estimate and range can be given. In good practice, companies include these uncertainties in their calculations and act conservatively. Suppose calculations show that an agricultural project delivers 1,000 tons of CO₂ reduction per year, but there is a ±10% uncertainty. In that case, the company can present 900 tons in its reports as a guaranteed reduction and treat the remaining 10% as a “safety buffer.” In other words, “if there is measurement error, let’s not present ourselves advantageously,” thus taking a cautious approach. Carbon market certifications apply similar buffers for uncertainty; some certifications automatically reduce the amount of approved credits if measurement uncertainty is high.

Another aspect of managing uncertainty is clarifying causality. One of the most challenging issues in insetting projects is proving that the impact observed actually stems from the project. Experts note that this includes the principles of causation and additionality. Additionality asks, “Would this reduction have occurred without the project?” If the answer is “it would have happened anyway,” then the project does not provide an additional benefit. Therefore, in insetting projects, companies should demonstrate that their investment is designed to make a critical difference. For instance, if a farmer is already planting trees and improving the soil using their own resources, it would not be appropriate for the company to invest there and claim it. But if the farmer transitions to a practice they could not have afforded without company support, additionality is achieved. Causality similarly tries to distinguish which factor led to the observed improvement (e.g., was it increased rainfall, or did the new practice raise yields?).

All these technical issues have a critical reflection in corporate communications: claim management. A carbon claim is a public statement by a company such as “We reduced this much in emissions” or “We are carbon neutral.” In insetting, claim management especially involves preventing double counting. If both the producer and the brand claim the same reduction in the supply chain, a bloated success story emerges, which undermines credibility. Therefore, international guidelines advise companies to clarify who is claiming what. Generally, priority is recommended for the party that actually implements the reduction (e.g., the farmer), while the purchasing company accounts for it as a Scope 3 reduction in its own inventory — but without issuing two separate “carbon credits” for the same reduction. The European Union’s new Carbon Removal Certification framework (draft as of 2024) also aims to bring clearer rules on this issue. Another aspect of claim management is the marketing language companies use: for example, even if a firm is doing insetting, proclaiming itself “carbon neutral” outright may attract criticism; instead, it is advisable to use more transparent language such as “I reduced emissions in my value chain by X%, and I am investing this much for the remainder.” Organizations like Carbon Market Watch and NewClimate Institute warn that without adequate oversight, insetting projects could also wear the mask of “low-credibility offsetting.” Particularly in insetting projects based on non-permanent carbon storage methods like forests and soils, exaggerated or premature claims should be avoided.

Ultimately, MRV processes, uncertainty calculations, and claim management must all serve one principle: emission reductions must be data-driven, and no impact should be reported unless it is measured in the field. Companies will be credible to the extent that they can support the outcomes of insetting projects with concrete data. Otherwise, projects that begin with good intentions can fall victim to miscommunication and be labeled “greenwashing.” Emphasizing the importance of data-driven approaches in the fight against the climate crisis, the IPCC’s Sixth Assessment Report shows that policies based on scientific evidence produce the most effective results. Likewise, companies must base their climate claims on science and data and avoid presenting unmeasured benefits as if they had occurred.

Carbon Insetting with Bluearf: Data and Supplier Monitoring Infrastructure

For companies that want to implement the carbon insetting approach, the most critical elements are the right data architecture and supplier participation. This is exactly where Bluearf and its supplier monitoring infrastructure “İzle” provide companies with unique advantages. Bluearf calculates and analyzes businesses’ Scope 1-2-3 emissions in detail. It also enables them to easily collect different sustainability data from extensive supplier networks. In this way, a company’s emission “hotspots” in its supply chain (for example, emissions from farmers) are clearly revealed. Thus, the company determines with data where to direct its insetting projects.

The success of insetting projects depends on the participation of suppliers in the field. Bluearf’s “İzle” infrastructure enables companies to collect data regularly from their suppliers. Farmers or producers can report the sustainability steps they implement (e.g., fertilizer optimization, regenerative agriculture practices) through İzle. In this way, the company can monitor the impact of actions in the field in real time. Because Bluearf offers companies the ability to monitor their carbon footprints in real time, it also allows them to track the reductions from an insetting project instantly. For example, when seasonal data from 100 farmers who transition to regenerative agriculture are uploaded to the platform, Bluearf can calculate and report their impact on the emissions inventory.

The Bluearf platform is designed to integrate calculation tools compatible with ISO 14064 and the GHG Protocol. In this way, companies can plan and report their projects in line with international standards. The MRV (measurement-reporting-verification) process is digitized and accelerated.

Bluearf can also add value to insetting in terms of stakeholder collaboration. Since supply chains typically include many small producers, educating these actors and ensuring their participation is a prerequisite for success. Companies can use Bluearf as a communication and education tool to encourage suppliers to participate in the project. For example, making the gains achieved by a farmer who transitions to sustainable farming techniques visible on the platform (both the carbon reduction and the yield increase) can motivate other farmers to take similar steps.

In conclusion, the carbon insetting approach seems poised to play a critical role in helping companies reach their 2030 climate goals. This approach places real and sustainable emission reduction at the heart of business practices. Because it is data-driven, transparent, and open to collaboration, it progresses in parallel with digital transformation. Innovative platforms like Bluearf are positioned at exactly this intersection, guiding companies on their journey to “internalize” carbon reduction. Experts advise companies embarking on the insetting journey to “start small and show progress as you go” — just as Nestlé advises other brands: “Start small and show progress as you go. When others see some farmers succeed, other suppliers will be more willing to join.” Perhaps the most enduring solutions for a carbon-neutral future will sprout in companies’ own backyards. Insetting promises exactly this — growing climate-friendly business models from within.

The information and examples presented in this article have been compiled from reliable sources such as Reuters, the World Economic Forum, Gold Standard, Klim, 3Degrees, and Bluearf. All numerical data and quotations are referenced as footnotes to the relevant sources. No claim is reported other than those based on real, measured, and verified impacts. In this way, the aim is to provide a technically sound yet understandable and transparent perspective on carbon insetting. In tomorrow’s low-carbon economy, our guide will once again be science and data — just as it is today.

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