| By Yinka Ibukun For firms operating in the global agri-food sector, indirect emissions have long been a known unknown. Big food conglomerates typically don’t trace their produce back to an individual small farm in Africa or Asia where it was harvested, and they therefore have no oversight over the emissions generated there. Yet regulators are increasingly calling on companies in the the sector, the world’s biggest emitter after fossil fuels, to take responsibility for their full supply chain. Data show indirect emissions — known as Scope 3 -- may account for as much as 90% of the overall carbon footprint in the agri-food industry. That’s making it impossible to overlook. This is where “insets” come in. The concept is similar to offsets where companies buy credits from a third party’s emissions-reduction projects to show their commitment to decarbonization. The difference is insets are generated from mitigation projects developed and funded by a company within its own supply chain. The idea is being tested by international food giants from Nestle SA in Switzerland to Olam Agri Holdings in Singapore. Julie Greene, chief sustainability officer at Olam Agri, said the company is now looking more at insets than offsets as a way to better prove its progress on reducing emissions. “Our first priority is to sell low-carbon products,” she said. “We want to make sure we are reducing our footprint.” The carbon offset market has been rocked in recent years by accusations of greenwashing. The Science Based Targets initiative, the leading authority for measuring corporate climate action, has historically not allowed for offsets to be used to meet corporate climate targets. Even though some industry groups have argued for their inclusion. Companies in theory have more control and visibility over an inset project than over an offset one. A study by Conservation International found that by focusing on 20 commodities alone, insetting could reduce emissions on agricultural lands by as much as 4 billion tons of CO2 equivalent a year. That represents about 8% of all global anthropogenic greenhouse gas emissions in 2023. Paying for your own emissions-reduction project is generally more expensive than buying offsets, which may limit the uptake of insetting. But agri-food companies often have other reasons for making sustainable investments in their value chain, beyond just meeting their climate targets. Projects that improve water availability, for example, can have direct benefits for a company’s bottom line. Denmark’s Carlsberg A/S is just one brewer putting money behind research into climate resilient crops as droughts and heat waves threaten water availability and barley yields. In practice many companies have been supporting insetting projects for years, but putting a label on the work and quantifying the difference it’s making has become more important to get internal buy-in. It’s also seen as a way to better communicate climate action and risks to outside stakeholders and customers. Today many businesses are either backsliding on climate goals or being told by regulators to walk back exaggerated sustainability claims. “Companies are going to be limited in what they can justify if they’re saying we’re doing this just to meet our climate goals,” said Elijah Innes-Wimsatt, director of corporate climate solutions at Conservation International. “The case [for insetting] can be much stronger when these actions ensure the resilience of their supply chain against increasingly intense climate shocks.” For unlimited access to climate and energy news, please subscribe. | 
