Rethinking Sustainability: From Offsetting to Insetting

Scope 3 emissions—those indirect emissions that occur throughout a company’s value chain—often account for the majority of a company’s carbon footprint. For many companies, these emissions are notoriously difficult to measure and manage due to the complexity and breadth of their supply chains. In consumer goods industries, for example, over 80% of greenhouse gas (GHG) emissions and 90% of ecosystem impacts come from activities outside
the direct control of the company itself.

Despite the challenges, addressing Scope 3 emissions presents a unique opportunity for meaningful change. By building transparent, data-driven systems and collaborating with suppliers, companies can drive substantial improvements in their environmental impact. This project is dedicated to exploring how companies can successfully navigate this complexity and build a compelling case for investing in circular and regenerative practices.

My reason for enrolling in this course was to find potential solutions that can help mitigate the looming climate crisis and find ways the private sector could be an effective stakeholder in advancing them. This project makes me hopeful and I’m looking forward to the learnings that are to come throughout the semester. I genuinely believe that in the current world where most experts warn that the 1.5-degree target is no longer viable, we need to be seriously rethinking traditional approaches and adopting solutions with the potential to make systemic change. We need to think beyond behaviors that lead to individual gain and recognize that the harms have started to reach all of us. We need to break out of the Tragedy of Commons.

Our project centers on the integration of circular and regenerative strategies into corporate value chains, focusing on the innovative concept of insetting. Instead of relying on traditional offsetting mechanisms—such as investing in external carbon credits or reforestation projects—insetting involves embedding sustainable practices directly within a company’s operations and supply chain. This shift from a linear approach—where damage is created and then cleaned up—to a more holistic model that prevents damage before it occurs is crucial for driving the systemic changes needed to address climate change effectively.

While traditional offsetting approaches have been a staple in corporate environmental strategies, they often fall short of addressing the core issues within the value chain. By adopting circular economy principles and regenerative practices, companies can reduce waste and emissions through smarter, more sustainable supply chain practices. This shift from a linear approach—where damage is created and then cleaned up—to a more holistic model that prevents damage before it occurs is crucial for driving the systemic changes needed to address climate change effectively. Insetting offers a way to integrate sustainability directly into the supply chain, creating long-term, systemic change. The scale of the challenge posed by Scope 3 emissions is daunting, but the potential for systemic change is immense. As companies increasingly recognize the importance of addressing their Scope 3 emissions, I am hopeful that we will see a broader adoption of circular and regenerative principles, making them the norm rather than the exception.

This project has reaffirmed my commitment to pursuing a career in climate finance and sustainability. It is making me hopeful that with the right strategies, tools, and mindset, it is possible to drive positive change and build a future where corporations contribute actively to environmental stewardship.