Nope, offsetting is not good enough!
The differences between insetting and offsetting and why brands should care about carbon literacy
Welcome to The Crisps–your weekly newsletter on anti-greenwashing and honest fashion communication. In this issue, we are discussing the differences between insetting and offsetting and why brands should care about carbon literacy. We will discuss insetting efforts by brands in our pro issue next week and will give you a checklist to detect greenwashing traps in your carbon communication. If you haven’t subscribed yet, make sure to not miss out.
The carbon offsetting sector was shaken to its core last week. An investigation by the Centre for Research on Multinational Corporations (SOMO) and the Kenya Human Rights Commission (KHRC) has brought to light sexual harassment within the celebrated Kasigau Corridor REDD Project in Kenya. According to the investigation, a group of higher-ranking male staff was continuously harassing female workers at the project's facilities and in vehicles for years without facing consequences.1
The Kasigau project is overseen by the non-profit Verra which is one of the biggest providers for carbon credits and offsetting projects. Verra is now pausing the project and any further credit issuances until they’ve investigated the cause. How can offsetting projects work if ongoing abuse was not detected through Verrat's „integral audit process“? And how effective are auditing and accreditation systems which are the foundation of the carbon offsetting industry?
The investigation comes at a time when the efficiency of carbon offsetting is increasingly being questioned. Because within the industry the consensus on how to best tackle the climate crisis evolved. From offsetting being championed to it being the last one of all the possible options. At least for now, the understanding within the industry is to focus on insetting first and offsetting last (for emissions you can’t tackle yet).
On that note, let’s dive into the differences between insetting and offsetting and why brands should care about carbon literacy.
Please note: We’re taking a little break over the European winter holidays. The last issue of this year will be published on December, 14th. We will be back on January, 4th 2024.
Are you carbon literate? When speaking about the environmental impact of your organization understanding greenhouse gas emissions (GHGs) and their effect is important. One of those key gases is carbon dioxide. Carbon literacy therefore describes understanding the carbon dioxide impacts caused by everyday activities and knowing how to reduce emissions. Carbon literacy covers the personal, communal, and organizational level.
What does carbon literacy mean in the context of fashion?
If we zoom in on the fashion industry, carbon literacy focuses on the carbon footprint (measured under the name of global warming potential) of producing garments from raw material to retail. It recognizes the impact of shipping, manufacturing processes, and waste in the industry. By adopting carbon literacy, brands can identify key areas for improvement, implement sustainable practices, and ultimately reduce their overall carbon emissions.
But why should brands care about carbon literacy and reducing their emissions?
Increase customer trust and loyalty: Consumers are looking to support brands that actually reduce emissions and tackle their share of the climate crisis. So authentic commitment to reducing emissions can build long-term trust and loyalty.
Save money: Over time, energy efficiency and waste reduction can lead to significant cost savings. Surprise.
Reach new customers: As a leader in sustainability, a brand can differentiate itself in the marketplace, potentially accessing new customer segments and markets.
Build stronger collaborations: When a company invests in sustainability initiatives that involve its suppliers, it can lead to stronger, more collaborative relationships that all parties profit from.
Reduce risks: Companies that reduce their emissions typically have a more sustainable supply chain that is less vulnerable to climate-related disruptions. They can also more easily stay ahead of regulatory changes and reduce the risk of environmental liabilities.
Improve accountability: Companies that reduce emissions in their own supply chain can more easily track the effectiveness of their sustainability initiatives and report on progress with more accuracy.
Insetting vs. Offsetting
When Ganni announced its plans to no longer invest in offsetting schemes but focus on insetting, the brand hit a nerve in the industry.2 Discussions around the effectiveness of offsetting projects were already bubbling up. But insetting seemed (and still seems) like an impossible task for many brands.
We will look at insetting examples of brands such as Ganni in our pro issue next week. Make sure to get the most out of the newsletter by becoming a pro subscriber.
Let’s get down to the main difference between insetting and offsetting:
Insetting means you’re investing in emission-reducing projects within your own supply chain. Or as the World Economic Forum puts it “insetting is doing more good rather than doing less bad”.3
Offsetting means you’re compensating for emissions by investing in external projects that reduce emissions somewhere else. Tree planting is one of the most common offsetting.
But why is insetting considered better than offsetting? Or better said why is offsetting criticized so heavily?
Offsetting projects might delay emission reductions. Let’s stick to tree planting projects for a second as they illustrate the issue well. Because trees only start capturing carbon after growing for a minimum of 10 years. Now think about how much carbon you additionally emit in the meantime and what you could have implemented in your own supply chain during that time.4
Measuring real-world emission reductions of offsetting projects can be ambiguous or less than what is really needed to offset the emissions. There have been several examples – one also by Verra which we mentioned in the beginning – that didn’t seem to be as effective as promised. That’s also why offsetting won’t be enough to claim your brand is climate-neutral under the EU Green Claims Directive.
There is a risk that offsetting can provide a "license" for companies to maintain or even increase their emissions because they are being offset elsewhere. Plus companies might not start reducing emissions in their own supply chain when they have already paid to offset them (in theory).
Still, offsetting can play a role in a comprehensive climate strategy. However, it is critical for fashion brands to approach it with caution and responsibility. Ideally, a brand is insetting for core operations and offsetting for hard-to-reduce emissions. So offsetting would be used together with insetting, not as a replacement.
If your brand is investing in offsetting projects, ensure that the projects are verifiable, effective, and genuinely contribute to the reduction of GHGs. And be transparent with your community about which emissions you tackle directly and which ones you are offsetting (plus how effective the projects really are).
While insetting is not an industry standard yet, there are some brands actively working on making it a reality. And we want to share and discuss their approaches in our pro issue next week. Among them are Ganni, Patagonia, and Eileen Fisher, so make sure to not miss the next issue.
Next to analyzing insetting projects and approaches by brands, we will give you a checklist that you can use to look for greenwashing traps when communicating insetting, offsetting, and carbon literacy.
If you’re working for a brand and are insetting, please also feel free to send over your approaches. We would be excited to look at them!
Best,
Tanita & Lavinia
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Disclaimer: The content and opinions presented in The Crisps newsletter are for informational purposes only and do not constitute legal, ethical, or professional advice. The Crisps does not endorse any specific brands or products mentioned in its content.
Centre for Research on Multinational Corporations (2023). Systemic sexual abuse at celebrated carbon offset project in Kenya. https://www.somo.nl/systemic-sexual-abuse-at-celebrated-carbon-offset-project-in-kenya/ (accessed online 06.10.2023)
The Ethos Online (2022). Why Ganni Made the Move From Carbon Offsetting to Insetting. https://the-ethos.co/ganni-made-the-move-from-carbon-offsetting-to-insetting/ (accessed online 08.10.2023)
World Economic Forum Online. Explainer: Carbon insetting vs offsetting. https://www.weforum.org/agenda/2022/03/carbon-insetting-vs-offsetting-an-explainer/ (accessed online 06.10.2023)
Kristjónsdóttir, M. K. (2019). Shaping the Climate Action trajectory within the Fashion Industry: A Case Study of a Small Medium Sized Enterprise.