Net zero: taking responsibility with carbon insetting

By Nick Campbell
Nick Campbell, Director: Energy Intensive Clients at Inspired Energy, shines a spotlight on the practice of carbon insetting.

Sustainability is rising up the business agenda rapidly for data centres as we all see the impact of climate change, energy costs continue to rise and pressure mounts from within the industry for centres to improve their environmental credentials - and fast. The term net zero is no longer just a buzzword; it’s become mission critical for data centres.

In January 2021, The European Data Centre Association launched a self-regulatory initiative ‘The Climate Neutral Data Centre Pact’ to support the EU’s climate neutral by 2030 goal. The pact aims to increase data centre sustainability.

Today, those responsible for meeting net zero targets in their organisation may be feeling the increased scrutiny the sector is under, while also tackling the challenges of reducing emissions in an energy intensive industry.

To date, the answer for many data centres has been to turn to carbon offsetting, but there’s a more sustainable and responsible way to reach net zero. Now it’s time to turn offsetting on its head and explore the benefits of carbon insetting.

Shining the spotlight on carbon insetting

Many of us are familiar with the process of carbon offsetting, in which an organisation finances a carbon reduction project to remove as much carbon from the atmosphere as they need to ‘offset’ their residual emissions. It might involve planting enough trees to absorb their CO2 emissions, for example, or investing in a renewable generation project.

These projects are often located in developing countries and have no links to the organisation. It’s a popular route to net zero though: in 2006 just 8.8 million tonnes of CO2e were covered by carbon offsetting schemes, but by 2017, this figure had risen to 62.7 million tonnes. Ultimately though, carbon offsetting can mask the challenge of reducing emissions and we must all take more responsibility for making our organisations more sustainable. It’s time to shine the spotlight on carbon insetting. 

A growing number of organisations are already investing in carbon reduction projects within their own supply chain. Unlike carbon offsetting, in which businesses invest in carbon reduction initiatives that have no connection to the business, carbon insetting enables businesses to build stronger relationships with their suppliers by working with them to reduce the indirect emissions they produce throughout the supply chain. 

Importantly, carbon insetting helps businesses focus on more sustainable practices to reduce their emissions. Typically carbon insetting involves investing in sustainability projects such as, using renewable energy sources, looking at on-site generation and upgrading infrastructure such as cooling systems. 

Although both carbon offsetting and insetting require investment, insetting ensures that the investment stays within the organisation’s value chain. By working with their suppliers, rather than investing in a separate project, businesses can identify emissions reductions opportunities that create shared value for everyone involved.

With many organisations now setting Sustainable Development Goals (SDGs), they can also ensure that the projects they implement are closely aligned with their chosen SDGs and make a tangible impact on the communities in which they operate. 

Businesses can also reduce their own carbon footprint by helping their suppliers to reduce their carbon emissions. Under the Greenhouse Gas Protocol, an organisation’s supply chain emissions are classed as ‘Scope 3’ emissions. Businesses that have been focused on improving their carbon footprint for some time are now finding that their Scope 3 emissions account for the majority of their overall footprint. Organisations like Pepsi and BT have both stated recently that their Scope 3 emissions now represent 90% or more of their total GHG emissions.

For businesses like these, carbon insetting will go much further to helping them achieve their goals than carbon offsetting, as it gives them the opportunity to lower their Scope 3 emissions by implementing carbon reduction strategies throughout their supply chains.

A net zero future 

Wherever you are on your journey to net zero, now is the time to make sure you have a robust and responsible plan in place to reach this goal. Carbon insetting has a sustainable role to play in this journey for many energy intensive industries and data centres are no exception. With the spotlight firmly on climate change as the UK hosts COP26, there has never been a better time to look at how you can make your operation more sustainable.


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