Carbon Offsetting vs Insetting: What's the Difference?

In this guide, we'll explain the difference between insetting and offsetting greenhouse gas emissions, and the role each has to play for your business.

What's the difference between carbon insetting and offsetting?

Carbon offsetting is now a familiar concept for many: you measure your emissions, then fund projects that reduce or remove an equivalent amount of greenhouse gases (GHGs) elsewhere in the world - initiatives like tree planting, clean cookstoves, or renewable energy schemes.

Carbon insetting means funding emissions reductions within your own value chain.

That might be:

• Helping logistics partners shift to electric vehicles
• Working with a materials supplier to reduce waste, improve energy efficiency, or source lower carbon raw inputs

Instead of buying credits from a project somewhere else in the world, you're investing in the systems you already rely on - making your own value chain more resilient and lower carbon over time.

Does carbon insetting reduce my business carbon footprint?

Businesses are under growing pressure to take meaningful climate action. From regulators and clients to frameworks like B Corp, EcoVadis, and CDP, the message is clear: measuring emissions isn’t enough, you'll need to demonstrate a plan to reduce them.

That’s where insetting can help. It does two key things:

1. It reduces your footprint: Insetting focuses on making reductions inside your value chain. That’s important because supply chain emissions typically make up the majority of a business’ carbon footprint – falling into Scope 3. Supporting your suppliers to decarbonise helps bring down your own footprint, while contributing to real-world reductions.
2. It strengthens your supply chain: Many of your suppliers are likely facing the same pressures you are – particularly if they sell into larger organisations. Helping them adapt not only cuts emissions but builds long-term resilience.

Is carbon offsetting bad?

No - carbon offsetting itself is not a bad thing to do. Where offsetting comes under criticism is when projects are poor quality - not properly verified to have claimed impact of designed to avoid negative side effects (e.g. large scale hydro) - or where businesses use offsetting as a way to avoid building a proper plan to reduce emissions. Insetting and offsetting are both valid, but serve different purposes.

Here’s a quick side-by-side comparison:

A credible climate strategy often involves both insetting and offsetting: start by insetting to reduce emissions within your supply chain, then use offsetting to compensate for the emissions you can’t yet eliminate.

Does offsetting reduce my emissions?

No - under the GHG Protocol, offsetting does not lead to a reduction in your carbon footprint. Offsetting investments should be reported separately to your carbon footprint data. It's misleading to 'net off' offsetting investments from your carbon footprint. To learn more, read our detailed guide here.

Do insetting projects count toward Net Zero?

‍Yes – insetting projects contribute directly to the emissions reductions required to reach Net Zero.

To align with Net Zero as defined by the Science Based Targets initiative (SBTi), businesses must focus on reducing emissions within their own operations and value chain. That includes Scope 3.

Insetting supports this by delivering real emissions reductions in your supply chain – rather than compensating for emissions elsewhere, as offsetting does. These reductions can be counted in your carbon footprint and tracked against your Net Zero targets.

It’s important to report these changes transparently, and to back them up with good data – ideally activity-based or supplier-specific, not spend-based estimates.

How do I inset emissions?

Insetting is a long-term commitment to reducing emissions in your supply chain - it takes time, a collaborative approach, and accurate data for insetting to be effective.

1. Measure your full-scope carbon footprint
Begin by understanding your baseline emissions. That means capturing an accurate, complete footprint across all three scopes - not just your direct operations. Where possible, use activity-based data or supplier-specific data instead of spend. This ensures you can properly reflect any changes you make - such as switching to lower-carbon materials - rather than emissions simply tracking financial outlay. It's important to track both your own emissions and those of your key suppliers to understand the full picture and track changes through insetting.

2. Identify your main supply chain drivers
Carry out a hotspot analysis to see where your largest impacts sit. Purchased goods, materials, transport, and logistics are common areas. Understanding these contributors helps you focus effort where it matters most.

3. Decide how you’ll resource supplier support
Successful insetting depends on your suppliers’ ability to act. Think about what support makes sense for your business – whether that’s sharing technical know-how, strengthening relationships, or providing financial investment. An important question to ask at this stage is: would this investment make sense for the business for other reasons - regardless of carbon? Proper consideration of commercial upside is essential to building the case for insetting budget.

4. Collaborate with your suppliers
Insetting works best as a partnership. Start an open discussion to understand suppliers’ realities – their challenges and opportunities when it comes to making changes. A collaborative approach builds trust and ensures progress is practical, not prescriptive or enforced.

What are examples of carbon insetting?‍

Insetting can take many forms, depending on your sector and where your biggest emissions lie. Here are a few common examples:

• ‍Logistics – Helping delivery partners transition to electric vehicles or consolidate shipments‍
• Materials – Working with suppliers to switch to lower-carbon raw inputs, such as recycled or regenerative materials‍
• Manufacturing – Supporting process changes that improve energy efficiency or reduce waste‍
• Food & Drink – Partnering with growers to adopt regenerative practices that lower emissions from soil, fertiliser, or livestock‍
• Packaging – Co-investing in lighter, recycled, or lower-emission packaging options‍
• Energy – Funding on-site renewables or energy upgrades for key suppliers

In each case, the emissions reduction occurs within your value chain – and can be measured, tracked, and accounted for in your footprint.

How Seedling helps

Seedling gives you the tools and expert support you need to build a credible climate strategy – combining accurate measurement, supply chain insetting, and high-integrity offsetting where needed.

We help you to:‍

• ‍Measure a full-scope footprint using activity-based data, so that changes you and your suppliers make – like switching to lower-carbon materials – are properly reflected‍
• Identify supply chain hotspots with a clear breakdown of Scope 3 emissions, helping you focus where impact is highest‍
• Build practical, supplier-focused plans through our decarbonisation modelling tool, tailored advice, and a growing library of proven actions‍
• Invest in verified offsets through our platform, with access to trusted, third-party certified projects – traceable, measurable, and aligned with global standards‍
• Track and communicate progress with reporting tools and a shareable impact page, designed to meet client and accreditation requirements

Our expert team works with you throughout – helping you engage suppliers, prioritise reductions, and use offsetting in a way that’s credible, transparent, and aligned with best practice. Chat to us - we'd love to hear from you.