What is carbon insetting vs offsetting

The escalating urgency of climate change has placed environmental responsibility at the forefront of business agendas globally.

Let's be clear: your business's carbon footprint—the total greenhouse gas (GHG) emissions it generates—is now a tangible metric with real-world consequences. Rising energy costs, increasingly stringent environmental regulations worldwide, and growing consumer preference for sustainable brands directly impact profitability and market access. Ignoring your emissions isn't just environmentally irresponsible; it's potentially bad for business.

For business owners in India, understanding and actively managing their carbon footprint has shifted from a fringe concern to a core element of smart business practice. With nearly 80% of Indian consumers embracing sustainability as a core value, proactively taking action to reduce their carbon footprint can directly impact their long-term business viability.

Two prominent strategies for mitigating carbon emissions are carbon offsetting and carbon insetting. This page cuts through the complexity to discuss the advantages and considerations of both approaches, and how sustainable shipping practices, such as DHL Express’ GoGreen Plus, can offer carbon-insetting options that align with your bottom line and enhance your brand reputation in India and beyond.

Understanding carbon offsetting

What is carbon offsetting? Think of it as an immediate way to neutralize the environmental impact of specific activities, like international shipping. An organization purchases carbon credits from projects that reduce or remove an equivalent amount of emissions elsewhere. One carbon credit generally represents one metric ton of carbon dioxide (CO₂), or its equivalent GHG.

Companies engaging in offsetting carbon emissions typically follow these steps:

1. Quantify emissions: Calculate the amount of carbon dioxide (or other greenhouse gases) the targeted activities produce. For instance, if your business ships textiles to Europe, you would calculate the Group 1, Group 2, and Group 3 emissions associated with that entire process from your factory to the buyer’s address.
2. Purchase carbon credits: Purchase the equivalent carbon credits in a specific external project.
3. Retire credits: Once purchased, these carbon credits are typically retired in a registry, signifying that another entity can no longer use them to offset their emissions. This ensures that organizations do not ‘double count’ carbon credits, keeping the process transparent.

A wide array of projects generate carbon credits, including:

• Renewable energy projects: Initiatives such as wind farms, solar power plants, or hydroelectric dams displace fossil fuel-based energy generation, thereby reducing carbon emissions.
• Reforestation and afforestation efforts: Planting trees and restoring forests increases green cover to absorb more CO₂ from the atmosphere.
• Carbon capture and storage: Although still in relatively early stages, such projects capture CO₂ emissions from industrial sources and store them underground, preventing their release into the atmosphere.

The fundamental principle at play is to compensate for unavoidable carbon impact by funding environmentally beneficial initiatives. However, while carbon offsetting supports vital environmental projects, it doesn't inherently make your core business operations greener or more efficient.

Understanding carbon insetting

What is carbon insetting? Well, this is where the game changes for business owners.

Unlike carbon offsetting, which focuses on external projects, carbon insetting involves implementing carbon reduction initiatives within a company or organization’s own value or supply chain. The core idea is to integrate sustainability directly into business operations, leading to tangible and often more directly controllable emission reductions.

Carbon insetting doesn’t just help mitigate your carbon footprint; it supports the building of a more resilient, efficient, and ultimately more profitable business.

Consider a textile manufacturer: carbon insetting could involve investing in energy-efficient machinery, sourcing organic cotton from local farmers using sustainable agriculture methods, or opting for green packaging. These actions reduce the textile manufacturer’s carbon footprint, lower operational costs, secure more sustainable supply chains, and enhance the brand's appeal to increasingly eco-conscious consumers.

Businesses adopting carbon insetting typically focus on:

• Improving energy efficiency: For example, upgrading machinery in manufacturing plants to more energy-efficient models or optimizing logistics routes for international shipping to reduce fuel consumption
• Adopting sustainable practices: For example, sourcing raw materials from sustainable suppliers or transitioning to electric vehicles for last-mile deliveries

Compared to the external benefits of offsetting, carbon insetting delivers several benefits directly to businesses:

• Direct cost savings: Improved energy efficiency and optimized resource use directly translate to lower operational expenses.
• Supply chain security: Investing in sustainable practices within your supply chain builds resilience against resource scarcity, climate-related disruptions, and regulatory changes2, especially with India’s vulnerability to climate risks3.
• Enhanced brand equity: Insetting demonstrates a genuine, tangible commitment to sustainability that strengthens your brand reputation and attracts environmentally aware customers—a growing domestic and international market segment.
• Long-term value creation: Integrating sustainability into your core strategy future-proofs your business against evolving regulations and consumer preferences, creating lasting value.

Here is an overview of the differences between carbon insetting vs offsetting:

DHL Express GoGreen Plus: carbon insetting for international shipping

For Indian businesses engaged in international shipping, DHL Express' GoGreen Plus offers a powerful carbon insetting solution. Instead of simply offsetting the emissions from your shipments, GoGreen Plus actively reduces them through:

• Utilization of Sustainable Aviation Fuel (SAF): By choosing GoGreen Plus, you directly contribute to the increased use of SAF for international shipping, significantly lowering the carbon intensity of air freight.
• Support for green technologies: GoGreen Plus also directs investment towards other green technologies within our shipping solutions network, further driving down emissions.

Through participating in carbon insetting with GoGreen Plus, organizations can tangibly reduce the environmental impact associated with their global reach—allowing you to succeed at sustainability goals without sacrificing profitability or viability.

Businesses in India looking to reduce their carbon footprint through carbon insetting with GoGreen Plus can take the following steps:

1. Register with GoGreen Plus: DHL Express' all-in-one MyDHL+ platform allows you to conveniently integrate the GoGreen Plus option into your international shipping bookings. This allows you to directly contribute to reducing emissions associated with your specific shipments.
2. Integrate sustainable practices: Complement your participation in GoGreen Plus by implementing eco-friendly measures within your operations in India, such as improving energy efficiency in your warehouses or adopting sustainable packaging.
3. Track carbon emissions savings: DHL Express provides transparent reporting on the carbon emissions reductions achieved through your participation in GoGreen Plus, allowing you to monitor your progress towards your sustainability goals.

Meet your green goals with DHL Express

The choice between carbon offsetting vs insetting4 depends on a business' specific goals and priorities. While carbon offsetting provides a means to immediately compensate for emissions, carbon insetting offers an avenue for deeper, long-term sustainability through integrating emission reduction directly into the logistics process.

We encourage businesses in India to explore the benefits of carbon insetting and leverage DHL Express' GoGreen Plus for more sustainable approaches to international shipping. You may also explore the comprehensive DHL Green Logistics Toolkit for additional strategies and insights on ways further to reduce your carbon footprint across your entire supply chain.

Open a business account now and take the first step towards aligning your sustainability goals with your core business priorities. The time to move beyond simply offsetting and embrace the strategic advantages of carbon insetting is now.