Insetting as a Strategic Approach to GHG Management

Explore the growing relevance of insetting, its benefits, implementation strategies and how to drive measurable climate impact and business resilience.

As businesses in Australia and New Zealand face increasing pressure to reduce their carbon footprints, many are turning to insetting – a proactive approach to greenhouse gas management that integrates carbon reduction initiatives directly within supply chains.

Unlike traditional offsetting, which involves purchasing carbon credits from external projects, insetting focuses on internal sustainability actions that align with a company's operations, values and long-term climate strategies.

In this article we explore the growing relevance of insetting, its benefits, implementation strategies and how we can support organizations in developing and verifying insetting programs that drive measurable climate impact.

The evolving landscape of carbon management in Australia and New Zealand

Governments in Australia and New Zealand have strengthened their commitment to achieving net-zero emissions, leading to tighter regulations and increased scrutiny of corporate emissions. Additionally, stakeholder expectations are pushing companies to adopt more transparent and impactful decarbonization strategies.

Regulatory and market trends

• Net-zero commitments: both Australia and New Zealand have set ambitious climate targets, driving businesses to adopt more sustainable practices
• Compliance requirements: industries are subject to more carbon reporting mandates, such as Australia’s Safeguard Mechanism, introduced in 2023 and which mandates emissions reductions for major industrial facilities, and New Zealand’s Emissions Trading Scheme (ETS)
• Consumer and investor expectations: stakeholders demand greater transparency and credibility in emissions reduction efforts

Challenges with traditional offsetting

• Risk of greenwashing: businesses that purchase carbon credits without internal reductions may face scrutiny
• Supply chain emissions: Scope 3 emissions (from suppliers and value chains) remain a challenge
• Cost and availability: high-quality, verifiable offsets are becoming more expensive and scarcer

What is insetting?

Insetting is a GHG reduction strategy where businesses implement projects within their own value chains to mitigate emissions and improve sustainability. It differs from offsetting by ensuring direct operational benefits and enhancing supply chain resilience.

Examples of insetting initiatives

• Regenerative agriculture: supporting farmers in transitioning to carbon-sequestering practices
• Renewable energy integration: investing in onsite solar, wind or bioenergy solutions
• Carbon-sequestering materials: adopting sustainable raw materials that absorb CO2
• Improved land management: enhancing forestry, biodiversity and soil health

Business benefits of insetting

• Regulatory alignment: helps businesses meet compliance obligations under Australia and New Zealand’s carbon frameworks
• Brand and reputation: demonstrates tangible climate leadership and avoids accusations of greenwashing
• Resilient supply chains: strengthens long-term resource security and supplier relationships
• Cost efficiency: can be more financially viable than external offset purchasing
• Stakeholder engagement: builds trust among investors, customers and communities

How can your business implement an insetting strategy?

To effectively integrate insetting into your GHG management plans, you should take the following steps:

Step 1: Assess and quantify emissions

• Conduct a GHG inventory assessment aligned with ISO 14064 and GHG Protocol
• Identify high-impact areas for Scope 1, 2, and 3 emissions

Step 2: Identify insetting opportunities

• Analyze existing business operations and supplier practices
• Determine feasibility of internal carbon reduction projects

Step 3: Develop and implement projects

• Establish carbon reduction targets with measurable KPIs
• Collaborate with farmers, suppliers and technology partners
• Secure financing for infrastructure improvements and incentives

Step 4: Monitor and verify impact

• Conduct third-party verification to ensure data integrity and credibility
• Report progress in sustainability disclosures and investor communications

How we support insetting initiatives

We provide industry-leading expertise in GHG verification, supply chain sustainability and environmental compliance. Our services include:

• Insetting program development
• Insetting methodology validation
• GHG inventories and emissions footprinting (ISO 14064, GHG Protocol)
• Insetting project verification and impact measurement
• Sustainable supply chain certification
• Regulatory compliance and ESG reporting
• Stakeholder engagement and risk assessment

Driving real impact and resilience

Insetting presents a transformative opportunity for Australian and New Zealand businesses to integrate sustainability into their core operations while reducing emissions. As carbon regulations tighten and market pressures increase, organizations must shift from transactional offsetting to strategic, long-term climate action. We can help you develop, implement and verify insetting initiatives that deliver real-world climate benefits and strengthen your business resilience.

For further information, please contact:

Dr Fionn MacKillop
ESG Project Manager
t: +611300095010