How Producers Trust Is a Carbon Insetting Platform

Producers Trust is a model of a carbon insetting platform that supports the transformation of their upstream supply chain partners.
by on Friday, August 12, 2022

Producers Trust: Modeling Carbon Insetting Solutions as Part of Our Platform

Producers Trust is uniquely positioned to pioneer a movement in sustainable supply chain developments that is becoming commonly referred to as carbon insetting.

At Producers Trust, we see carbon insetting as a strategic approach by corporations to actively reduce the carbon impacts of their supply chains. Part of this approach includes supporting the transformation of their upstream supply chain partners into better practices. It’s a collaborative process. 

What are some of the big stakeholders saying about carbon insetting? 

“Insetting refers to a company offsetting its emissions through a carbon offset project within its own value chain. In contrast to a typical carbon offset project, emissions are avoided, reduced or sequestered upstream or downstream within the company’s own value chain.”MyClimate.org 

“Carbon ‘insetting’ focuses on doing more good rather than doing less bad within a value chain. Carbon insetting is the implementation of nature-based solutions such as reforestation, agroforestry, renewable energy, and regenerative agriculture.”World Economic Forum

The practices of carbon insetting stand juxtaposed to carbon offsetting in which a supply chain company purchases credits to offset their carbon impacts. This practice doesn’t necessarily incentivize companies to commit fully to shifting their impacts and supporting sustainable supply chain partners. We need this kind of commitment to create more tangible and impactful outcomes than we see from simply buying third party credits. 

Carbon Insetting & the Food Industry 

To achieve carbon insetting to scale requires a new framework with coordinated efforts and collaborative data systems. Stakeholders all along the supply chain must commit to efforts that create mutual incentivization and build financing and market commitments. 

The greatest driver in the evolution to a carbon insetting supply chain model is for downstream buyers to guarantee the purchase of climate smart agriculture outputs. This incentivizes producers to transition practices and finance and insurance groups to commit resources to the producers via a de-risking from the buyer. 

With a purchase commitment in place, agricultural producers at the start of the supply chain must transition their practices to reduce carbon emissions. This requires capacity building to educate and build systems around improved practices. 

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There are many variables to consider when it comes to transitioning to climate smart agriculture practices. For example, specifics such as product category, region, and existing practices, as well as the goals for carbon reduction, all factor into the risk and investment associated with the transition. 

Fortunately, there are extension services that can assist with the producer transition to better practices. These services often require grant or government funded programs to finance the work.  

Alongside all of the transitioning practices are the validation of impacts, especially carbon as it relates to insetting. There must be a baseline estimate of carbon emissions and then the ongoing measurements during and post-transitioning of carbon impact. While there are many methodologies and platforms arising around carbon emission, there is an accepted framework for carbon emissions validation through Gold Standard and Verra which is referred to as a MRV, or “Measure, Report, Verify.” 

The carbon insetting model and the validation of the program is challenging as it includes small shareholder farmers. This adds complexity to the investment, capacity building, aggregation, and overall risk. 

The International Platform for Insetting has put together a diagram that helps to show the full cycle opportunity that defines a successful model for insetting. 

Carbon Insetting: Addressing the Challenges

Producers Trust is launching a “Sustainable Supply Chain Platform.” This is a collaborative ecosystem approach which aggregates supply chain actors into a vertically coordinated data model. Our approach will make it easier for organizations to work together to achieve common goals. 

We know the critical importance of fostering holistic and mutual beneficial partnerships. To us, this looks like supporting corporate buyers as they coordinate buying at the source and building in financing and capacity development on the ground. 

Through our Producers Market data platform we capture on the ground data. This helps us implement a decentralized model of digital MRV that can satisfy the Gold Standard and/or Verra frameworks for carbon. 

It’s no secret that consumers are demanding greater transparency. As such, we see a marketing opportunity for brands here. In addition to the positive outcomes of insetting efforts, downstream brands can share their stories of impact to consumers who are seeking transparency, values, and purpose from their brands. 

The marketing component provides additional economic incentive for brands to integrate into climate smart supply chains. 

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The Future of Scaling Insetting Models

The next step in scaling models of carbon insetting is to build many validated use cases, a framework for collaboration, and a network for sharing best practices and program results.  

Validation is crucial. Data must show the economic viability and commercial impact to inspire other corporates, finance groups, and insurance groups to engage and scale at a lower risk.

Events such as the UN General Assembly and COP27 present opportunities to coordinate efforts with organization leadership stakeholders to make initial commitments to funding pilot projects and offtake commitments to enable the movement to scale. 

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