by Emily Damon | June 18, 2025
What if the most powerful climate solutions are already within our reach – and our value chains? At ClimeCo, we see insetting as one of the most powerful (and often underutilized) tools companies have to drive real, measurable progress toward net-zero, helping organizations move faster, smarter, and cost-effectively.
What Is Insetting, and Why Does It Matter Now?
Insetting is a climate-action strategy enabling companies to reduce greenhouse gas emissions directly within their own value chains. Unlike offsetting, which finances decarbonization projects outside a company’s operations, insetting focuses on Scope 3 emissions, that occur upstream or downstream in a company’s supply chain. Companies that can reduce Scope 1 & 2 emissions increasingly connect with these insetting buyers, bringing critical finance to their decarbonization projects. With its focus on value chains, insetting creates a long-term demand signal for decarbonization and builds resilience throughout the value chain.
This approach is especially critical today. According to the United Nations’ Emissions Gap Report 2024, global greenhouse gas emissions are at an all-time high, with the majority of many companies’ footprints stemming from their supply chains. Value chain emissions can account for over 90% of total impact in sectors like food, agriculture, and land use. Insetting offers a direct pathway to address these emissions at the source.
Insetting also meets the rising demand for sustainable products and brands. Did you know that consumers in the U.S. are willing to pay an average premium of 11% for products with a minimized environmental impact?[1] On top of that, nearly 50% of Gen Z and Millennials are willing to pay a premium for sustainable products.[2]
Insetting vs. Offsetting: Complementary Tools for Net-Zero
Both insetting and offsetting are vital for powering the net-zero transition, but they serve different roles:
| Aspect | Insetting | Offsetting |
| Where it Occurs | Only within a company’s own value chain | Anywhere in the world, in any value chain |
| What Types of Emission Reductions are Eligible? | All | Only emission reductions captured in a methodology from a credible registry, such as CAR, ACR, Verra, Gold Standard |
| Buyer Claims | In accordance with GHG Protocol and SBTi, the inset buyer earns Scope 3 “reduction” or “abatement” claim; aligned to SBTs and net-zero targets | Per SBTi, offset buyer earns a claim of “compensation”; can support carbon neutrality claims |
| Seller Claims | Inset seller retains their Scope 1 or 2 “reduction” or “abatement” claim | Offset seller can no longer claim any emission reduction |
| Emission Reduction from What? | Prior year | Counterfactual baseline (i.e. what would have happened without the emission reduction activity) |
| Business Impact | Builds supply chain resilience, long-term decarbonization | Immediate impact, ability to incentivize emission reductions beyond corporate value chains (e.g., clean cookstoves in homes) |
| Type of Agreements | Spot transaction, long-term offtake, multilateral deals | Spot transaction, long-term offtake |
| Example Activities | Supplier renewable energy usage, sustainable agriculture, low-carbon building materials, alternative fuels in transportation | Reforestation, methane capture, super pollutant destruction, clean cookstoves |
| Example Deals/Press | • Freeport signed a 5-year deal to buy low-carbon ammonium nitrate solution for its copper mining operations in the United States from an LSB Industries site using carbon capture and sequestration. • Mars Inc. invested $27M with dairy exporter, Fonterra Cooperative Group, to reduce GHG emissions at farms using lower-carbon feed and fertilizer and those implementing removals. • Microsoft agreed to pay Sublime Systems for the environmental attributes of low-carbon cement. • Hoegh Autoliners secured the “first-ever low-carbon towage service in Australia” with Svitzer’s use of biofuels | • Apple announced that all Apple Watches would be carbon neutral. • Lenovo enables customers to offset the estimated carbon emissions of their PCs, desktops, and tablets through its CO₂ Offset Service. • Hilton offers Carbon Neutral Meetings through its Meet with Purpose program. • Delta Air Lines purchased 12 million carbon credits to offset millions of tonnes of CO₂ emissions from its operations. • Microsoft committed to becoming carbon-negative by 2030 by investing in a portfolio of nature-based and engineered carbon offset projects. |
At ClimeCo, we design integrated, data-driven strategies that leverage insetting and offsetting, always aligned with our client’s sustainability goals and verified to the highest standards.
Enabling High-Integrity Insetting
As an insetting market-maker, ClimeCo brings together companies collaborating to accelerate decarbonization. We structure and execute deals within value chains that enable all parties to reduce emissions and progress toward net-zero. Due to our proven track record and long-standing leadership in sustainability solutions, we connect companies that cost-effectively reduce their emissions with entities in their value chain with reduction targets. It’s truly a win-win as companies can do the right thing for the planet, and it’s good for their business.
But high-integrity insetting isn’t just about cutting emissions – it’s about doing so in a credible, transparent, and beneficial way for people and nature. ClimeCo recently contributed to Conservation International’s six principles for high-integrity insetting, which emphasize climate impact, collaboration across supply chains, shared value for communities, positive outcomes for nature, credible data, and practical monitoring. These principles offer companies a clear, actionable framework, even as industry standards continue to evolve, and are well-aligned with the latest guidance from the Science Based Targets initiative (SBTi). Additionally, ClimeCo is one of over 20 participants in the AIM Association Test Pilot Program by the Advanced and Indirect Mitigation (AIM) Platform to advance insetting across sectors, including consumer goods, technology, finance, logistics, energy, and industrial.
What’s Next?
The power of insetting is clear: it can build more resilient supply chains, support communities, and deliver measurable climate benefits. As more customers buy environmentally responsible products for a small premium, these small shifts create an outsized impact – both for the environment and for businesses’ bottom lines. By working together, we can make insetting common practice and accelerate the transition to a net-zero future.
For more information about how ClimeCo can help your organization unlock the power of insetting, contact us.
Works Cited
[1] Brain & Company – Consumers say their environmental concerns are increasing due to extreme weather; study shows they’re willing to change behavior, pay 12% more for sustainable products
[2] McKinsey – The state of grocery in North America 2023
About the Author
Emily Damon leads initiatives to accelerate decarbonization, including innovative approaches like insetting. Also known as value chain interventions, insetting provides a GHG Protocol- and SBTi-aligned path to achieving net-zero emissions. With over 15 years of experience in sustainability consulting, Emily brings deep expertise to support ClimeCo’s diverse network of clients across industries such as energy, manufacturing, logistics, and consumer-facing brands. She creates strategic deals and partnerships that efficiently connect financial resources to impactful decarbonization projects. Emily’s comprehensive knowledge spans various critical areas of corporate climate strategy, including greenhouse gas accounting, target-setting (SBTi, net-zero, carbon neutral), sustainability disclosure, abatement strategy development, marginal abatement cost curve analysis, and decarbonization implementation (efficiency, renewable energy, low-CI procurement).
