Companies that are turning to “insetting” as an alternative to carbon offsetting may not be pursuing a more credible approach, according to carbon credit quality expert Pedro Barata. Insetting involves companies implementing measures within their own value chain to reduce emissions, rather than purchasing carbon credits. Nestle, EasyJet, and Kering have recently announced their shift towards insetting. However, Barata questions whether insetting methods are any more credible than offsetting claims made outside of the value chain using high-quality credits verified by third parties. He also questions the cost-effectiveness of insetting compared to paying for emissions reduction initiatives elsewhere. Barata argues that knee-jerk reactions like insetting are not subject to the same scrutiny as offsetting and therefore may not have the same impact on global mitigation efforts. Barata is a veteran in the carbon markets industry and currently serves as a senior official at green group EDF. He is also a member of the executive board of the UN’s Clean Development Mechanism carbon crediting program and co-chair of the panel of experts advising the Integrity Council for the Voluntary Carbon Market.
While companies like Nestle are embracing insetting as a way to reduce their emissions, Barata questions the lack of standards and scrutiny applied to these methods. He argues that offsetting claims can be verified by third parties and are subject to media scrutiny, whereas insetting claims are not. The integrity of insetting initiatives is still being debated, with carbon credit issuance bodies like Verra and Gold Standard currently working on ways to prove their credibility. Insetting involves companies implementing measures within their own value chain, such as supporting farmers in adopting sustainable agriculture practices and restoring habitats. However, Barata thinks that these measures may not be as effective as offsetting claims made using high-quality credits. He also questions the cost-effectiveness of insetting compared to other emissions reduction initiatives. Barata’s criticisms highlight the need for clear standards and scrutiny in the emerging field of insetting to ensure that it is an effective strategy for companies to reduce their emissions and meet their net-zero targets.