[C]arbon rethink: Offsetting is out. Insetting is the future

Ganni, a Scandi fashion brand, is working directly with suppliers to invest in ways to mitigate carbon emissions. It’s called insetting, and will do more to help the climate than offsetting, says Rachel Cernansky from Vogue Business.

Carbon offsets are out and insetting is in for Ganni, which is changing tact in how it tackles the biggest, most challenging sources of emissions in a bid to decarbonise its supply chain.

The Copenhagen-born brand says it will work directly with its suppliers to evaluate emissions hotspots and start investing in ways to mitigate those at the source, rather than through offset projects elsewhere. “We stopped compensating for our carbon footprint. We put aside that money and saved it up for investments in bringing down the carbon footprint of our supply chain, making actual reductions along our supply chain,” says founder Nicolaj Reffstrup.

Carbon offsetting involves paying to remove greenhouse gas emissions somewhere to compensate for emissions generated somewhere else, such as planting trees to offset factory energy use. Carbon insetting is more direct. It means reducing carbon emissions directly within a company's supply chain or supply chain communities – going to the root of the problem. Done correctly and alongside other credible efforts, offsets can help combat the climate crisis. However, fashion has relied on this too much, climate experts have repeatedly said, and the industry has neglected the more necessary work of decarbonising its own supply chain. One reason: it’s more costly and challenging to do so. “There was a growing awareness that some might use this as a way of paying indulgence for their bad behaviour, and we didn't want to be part of that conversation,” says Reffstrup.

The science is very clear that supply chain emissions are the single most important issue for the industry to address, which is the reason the Science Based Targets initiative is specific about not allowing participating companies to use offsets to meet their goals, and must reduce them directly in their supply chain to meet the criteria. Equally importantly, reducing those emissions requires significant levels of investment to transition to renewable energy and upgrade certain types of equipment, but many suppliers have neither the resources nor the incentive to undertake those investments on their own. So far, brands have largely avoided helping them, but supporting suppliers’ transition to renewable energy has been identified as an urgent priority for fashion.

“We stopped compensating for our carbon footprint. We put aside that money and saved it up for investments in bringing down the carbon footprint of our supply chain, making actual reductions along our supply chain.”

 A handful of examples have emerged in recent years. Levi’s, for example, has partnered with the International Finance Corporation to help factories and mills reduce energy and water use, and a growing number of brands recognise the importance of purchasing practices in determining suppliers’ ability to invest in sustainability. Ganni’s strategy may stand out because of its explicit focus on both. (The brand may still use offsets in instances where reducing emissions directly is not an option.)

The first major step towards insetting, for Ganni, is to build a solar plant in partnership with a longtime supplier in Portugal that makes its cotton T-shirts.

“We know that we need to support our suppliers in the transition to renewable energy and electricity,” says Ganni’s head of sustainability and CSR Lauren Bartley. “One of the reasons to start in Europe first is that we’re closer, so we can have the hands-on experience of how to run a successful carbon insetting pilot before then moving it to Asia, for example.”

To evaluate the success of the pilot, she says Ganni will measure on-site carbon and biodiversity before and after implementation. If significant positive impacts are identified, the brand plans to scale similar efforts with other suppliers. […].

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With a company goal to reduce absolute emissions by 50 per cent by 2027, Reffstrup recognises Ganni has a lot of work to do. The brand has begun exploring more responsible and next-gen fabrics; phasing out virgin animal leather; developing circular business models; and reducing emissions from transportation.

[…]. “The situation is so urgent, you just have to take tangible action. It's like building the plane while you're flying it,” he says.

This is an excerpt from an article originally written by Rachel Cernansky and published by Vogue Business.