Reducing carbon footprints and complying with CSRD regulations is essential to enterprises. Especially, commerce with frequent logistics operations faces challenges of realizing emissions reductions. Understanding the difference between carbon insetting and offsetting is key to developing effective sustainability strategies. Our recent webinar, "Carbon Insetting vs. Offsetting," provided insights into these approaches and their impact on Scope 3 emissions.
Carbon Insetting vs. Offsetting | gryn Webinar
Understanding Carbon Credits
Carbon credits are tradable certificates representing the reduction or removal of one ton of CO2e from the atmosphere. They come in two main types: avoidance credits, which prevent emissions, and removal credits, which directly capture CO2e. Both types play a vital role in carbon management.
gryn tip 1
Prioritize high-quality carbon credits that ensure real & permanent emission reductions.
Carbon Insetting vs. Carbon Offsetting
Insetting involves direct investments within your supply chain, such as upgrading fleets to use sustainable fuels or implementing energy-efficient technologies. This approach helps reduce emissions where they originate, providing more tangible and long-term benefits. Offsetting, on the other hand, involves purchasing carbon credits to fund external projects that might reduce CO2e emissions, but according to CSRD it is not possible to remove CO2e with offsetting. It is an option, however this method does not directly impact the emitter's supply chain.
gryn tip 2
Use insetting to achieve immediate, measurable impact within your supply chain.
Regulatory Compliance
Compliance with frameworks like the Corporate Sustainability Reporting Directive (CSRD) and Environmental Sustainability Reporting Standards (ESRS) is crucial. These regulations require detailed to report on sustainability efforts and to set sustainability targets, e.g. through applying SBTi (see below).
gryn tip 3
Automate your data collection to ensure accuracy and ease in meeting CSRD and ESRS requirements.
Challenges & Best Practices
Implementing insetting projects can be challenging due to the complexity of supply chains. Collaboration with suppliers and leveraging best practices can help overcome these hurdles.
gryn tip 4
Foster strong supplier relationships and share best practices to ensure successful insetting project implementation.
Science-Based Targets
Setting science-based targets (SBTs) aligns corporate goals with global climate objectives. The SBTi is recognized as one of the prominent frameworks for setting science-based targets that align with the goals of the Paris Agreement, and its methodologies are often referenced and recommended in the context of corporate climate strategies. While it is a highly respected and recommended framework, it is not the sole mandatory option under the CSRD. Companies can choose from a range of compliant methodologies to set their sustainability targets.
gryn tip 5
Align your emission reduction goals with the SBTs using a methodology compliant with CSRD to recognized & to ensure they are science-based and impactful.
Book & Claim Systems
In book and claim systems, the characteristics of sustainable fuels, such as their emission profiles, are decoupled from the physical products and tracked through a registry system. This allows for the mixing of sustainable and conventional fuels during distribution while maintaining the ability to allocate the environmental benefits of the sustainable fuels to the organizations that purchase them, even if the actual fuel they receive is a mix of conventional and sustainable types.
gryn tip 6
Implement book & claim systems to simplify the integration of sustainable fuels into your logistics operations.
gryn Conclusion
Reduce as much CO2e as possible via supply chain optimization and cover the remaining part with carbon insetting. Using an integrated platform can automate data collection and provide actionable insights, ensuring compliance and driving sustainability forward.
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