L'Oreal, Chanel and Nespresso pioneer 'carbon insetting'

Leading-edge companies striving for carbon neutrality often turn to carbon offsets to deal with the hardest-to-reduce emissions, such as those created by employee travel. According to Forest Trends (PDF), hundreds of organizations purchase offsets as one component of their carbon mitigation strategies, investing in forestry, methane capture or wind energy projects unrelated to their businesses.

But what if companies could support carbon offset projects within their direct supply chains? What if they could offset some portion of their carbon emissions by financing targeted forestry initiatives to bolster their supply chains and ensure reliable procurement of key natural ingredients?

They can, through a new practice called "carbon insetting."

Carbon insetting — essentially the process of planting trees in agroforestry systems — is a type of carbon emissions offset that’s gaining popularity, particularly among European brands such as Chanel, Nespresso and L’Oreal. Unlike traditional carbon offsetting, insetting is about much more than carbon sequestration. It’s about companies building resiliency in their supply chains and restoring the ecosystems on which their growers depend. Insetting takes a holistic approach, tackling both environmental and social challenges, largely poverty among smallholder farmers.

Take Nespresso, a division of Nestlé, that produces high-end coffee makers and premium grade coffee. Nespresso has embarked on a massive initiative with a principal architect of insetting, PUR Projet, planting 10 million trees in Colombia, Guatemala, Ethiopia, Mexico and Nicaragua to reach carbon neutrality by 2020.

Nespresso is investing $600 million over five years in the initiative because it sees insetting as a "virtuous cycle," said its French division president, Arnaud Deschamps. "You plant trees to offset your emissions. You help your farmers with better land, better ecosystems and better revenues, so their children want to be farmers too. And we upgrade the coffee quality for our consumers."

To design the initiative for Nespresso, PUR Projet relies on university-based forestry specialists, soil scientists and social science researchers. It selects only native tree species and hires farmers and community members to do the planting at each locale. What’s more, it tailors each growing region’s tree planting program to the particular needs of the community.

"We meet the farmers at the origin of the project and we ask them what are the key issues that they’re facing," said PUR Projet founder and president Tristan Lecomte, who adds that it can take a lot "digging in" to help companies locate the growers at the base of their supply chains. 

PUR Projet has developed insetting initiatives for dozens of big brands over the past decade, planting some 7 million trees across five continents — and sequestering 1.4 million equivalent tons of carbon dioxide, among other ecosystem benefits.

"Everywhere we go we hear similar ecosystem and climate change challenges," said Lecomte, "and we propose a solution with agroforestry, proposing adaptive models depending on what farmers want."

In Colombia, for example, the tree plantings are designed to help address growing water scarcity and protect the local water supply by preventing soil erosion and landslides in a region that’s been heavily deforested to create pasture lands for cattle. Fruit and hardwood tree species were selected to provide additional sources of revenue for the farmers. 

Promoting timber products may seem counterproductive, but research shows that sustainably managed working forests can provide substantial carbon mitigation.

To further address smallholder poverty, Nespresso worked out an inaugural retirement program for Colombian coffee farmers with the government and national federation of coffee workers.

"If we want the children of farmers to keep farming, we need to give them a better future," said Deschamps.

One key difference between carbon insetting and offsetting is that certification of the carbon benefit is not required, although PUR Projet’s projects are verified and audited by a third party. Certification is expensive, said Lecomte. "If you can see what’s going on in your supply chain, why waste the money? We tell companies, 'If you don’t need to make a carbon claim, put the money in the trees, not in the certification.'"

Ice-cream maker Ben and Jerry’s, which is financing the planting of 100,000 native trees in Rwenzori, Uganda, to support vanilla growers, nevertheless has chosen to certify its program through the Verified Carbon Standard. Jackfruit and African cherry trees were among the species selected to help the smallholder vanilla farmers in Rwenzori diversify their income. Intercropping these trees provides shade and ecosystem benefits for the vanilla crops, which are threatened by climate change impacts — heat, longer droughts and irregular rains.

Beyond verifying the carbon benefit, PUR Projet has developed an International Platform for Insetting, a collaboration between academics, certifying organizations and companies that acts as a standard-setting body for the full range of ecosystem and social benefits provided through insetting. 

PUR Projet backs up this platform with extensive research monetizing insetting’s benefits. Lecomte said that on average it costs $4 to plant and monitor a tree for a period of four years, but that tree generates an estimated $14 in ecosystem and social benefits.

That $14 doesn’t show up on a company’s bottom line, but it shows up in the procurement of higher-quality ingredients, more reliable supply and strengthened ties with suppliers.

As Andrea Asch, manager of natural resources at Ben and Jerry’s, put it, "Insetting looks at the total needs of the community. It’s not so much about the carbon sequestration reductions we’re trying to achieve. It’s about helping communities adapt to the impacts from the emissions all of us in the global north have dumped into the atmosphere."