🌱 GANNI is swapping carbon offsetting for insetting, and our introduction to carbon removal.

Featuring Do Good Foods, Mindful Chef, IKEA, Toast Ale and more...

Dec 12, 2022

Happy Monday!

This week we cover:

Quick Take: Let’s take a look: Carbon Removal 101
Brand Spotlight: Straight to the source: How GANNI swapped offsetting for insetting.
In case you missed it: 🌱 Carbon Handprints: How IKEA are flicking the switch on renewable energy.

> Good News Last Week

🎯 Do Good Foods partnered with Post Holdings’ Michael Foods to supply verified carbon-reduced eggs. A monthly carbon receipt will quantify the impact the company has made to carbon change. Each dozen eggs will prevent approximately one pound of carbon from entering the atmosphere.

🎯 Tony’s Chocolonely announced that the price they pay for cocoa is a best practice way to help farmers move out of poverty, as recognised by the Voice Cocoa Barometer 2022 report.

⭐️ Kahlua reported the full traceability of the Arabia coffee used in their products. Sourced from remote Mexican farming communities participating in its Coffee for Good initiative in 2016.

⭐️ M&S and BP Pulse signed new agreement to add 900 new EV charge points to 70 M&S stores in the next 2 years. This will add 40,000 KWHs of charging capacity to the UKs’s EV infrastructure.

⭐️ Morison announced they are to scrap date labels on over 200 fruit and vegetable lines. With changes to be implemented before Christmas, on many items dates will be replaced by a code system for Morrison’s colleagues to ensure freshness on the shelf.

⭐️ PepsiCo to double the use of reusable packaging to 20% by 2030. With four initiatives to expand the SodaStream business, increased refillable plastic (rPET) and glass bottles, increase fountains with reusable cups and accelerate growth in powders and concentrates.

⚡️The Fashion Pact announced new initiatives aimed at adding renewable energy capacity to the grid. The CEOs of 12 fashion companies have committed to procuring renewable energy, with the goal to add 100,000 MWh per year of wind or solar power generation to the grid in Europe.

> Click on each link to read more.

> Quick Take

Let’s take a look: Carbon Removal 101

Carbon. A major currency of climate change, our obsession with it underpins pretty much all discussions on the topic. And for good reason - carbon dioxide is the primary contribution to human induced climate change and remains in the atmosphere far longer than any other heat trapping gases. It’s what we use to determine the longevity of Earth as we know it, how we influence change and the primary way we measure the impact of our warming planet.

Like financial currency, carbon can be traded, stored and bought (hypothetically), and just like any other currency, demand influences price and availability. This carbon market is having increasing influence on corporate sustainability strategies, but today we’re digging into carbon removal specifically.

Let’s start with some basic terminology:

Offsetting is the activity of balancing your company's emissions through investing in environmental projects around the world. Many companies do this to become ‘carbon neutral’ including the likes of Toast Ale, Cotopaxi and SunGod.
Insetting is the activity of balancing your company's emissions through investing in environmental projects within your value chain - think supporting farmers, crop rotation and nature based solutions. Brands like GANNI (read on for more) and Mindful Chef are starting on this journey already. We’ve already outlined insetting in this article.
Carbon Removal is the activity of supporting projects that actually remove carbon from the atmosphere, rather than just reducing emissions. Naturally, this last element of the market is the most needed, but the most challenging. It’s also the newest solution to join the carbon ‘table’.

All options are made possible through carbon credit schemes, or verifying projects against their carbon reduction volumes. As always, quality, validity and legitimacy is essential - and not always easy to achieve.

Let’s look at it this way - offsets and insets ‘compensate’ for damage that we’re doing, or will do. Carbon removals supposedly ‘reverse’ the damage we’ve already done. Many stress that the only way to get to net zero, and keep the temperature increase to below 1.5°C, is to start removing the carbon that’s already out there via, you guessed it, carbon removal methodologies. The latest IPCC report emphasised the need for this heavily (read more here).

Reminder: Of course it’s not that binary or simple, with many carbon intensive activities also comes biodiversity loss, pollutants, other greenhouse gases, exploitation and a whole host of other nasty impacts. For the sake of focusing on carbon removal today, we’ll stick to focusing on carbon.

Carbon removal can be divided into two categories:

Artificial - this includes Direct Air Capture (DAC) and enhanced mineralisation.
Natural - this includes afforestation, using biofuels and carbon storage in the soil.

Both these options take time - a long time for the amount of carbon we have to combat - and money. However, it’s an inspiring space. On a remote coastline in Hawaii, start-up company Heimdal has created the world's first ‘ocean-assisted’ carbon removal, a process that can both permanently store CO2 and help reduce ocean acidification, that is significantly cheaper than the DAC alternatives.

There are some incredible companies and innovators pioneering this ever-growing space, providing inspiration to others in the hope we follow suit. Stripe and Shopify both have DAC credit buying schemes built into their platforms, Microsoft have signed into a 10-year carbon removal collaboration with Climeworks (a Swiss air capture tech company), Google are investing in their own reforestation efforts and start ups in the climate space.

Whilst it can’t be our only method of combating climate change, and is certainly no silver bullet, the carbon removal market is a rapidly growing and fascinating space for any brand to get familiar with, engage with and perhaps choose to support. We’re starting to see signs of this happening in our industry, with Ocado becoming the first grocery retailer to publicly enter the carbon removal space. It’s likely many other FMCG brands are active in supporting carbon removal via buying credits, however, there are few open-source examples. So, if you work in, (or know of) a brand engaging with carbon removal let us know - info@followingthefootprints.com.

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Straight to the source: How GANNI swapped offsetting for insetting

With a goal to reduce their absolute emissions by 50% by 2027 (after working with Plan A), alongside 44 key ‘Gameplan goals’ that they launched in 2019 to keep them on track, GANNI are certainly ambitious. The good news? Since setting these 44 goals, GANNI have already achieved 30 of them, putting them well on track to achieve them all ahead of their 2023 goal.

Their progress has a key differentiation from other fashion brands; rather than paying for their carbon footprint to be ‘removed’ somewhere else, GANNI are focusing on investing in their value chain to avoid emissions at their source. They’re focusing heavily on insetting, not offsetting.

“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”
GANNI founder Nicolaj Reffstrup (source)

Insetting is often lauded to be a more holistic approach than offsetting too, with activity chain investment having co-benefits like improved workers rights, and the assessment and acknowledgement of biodiversity.

What’s required for this to work?

Teamwork: GANNI are working closely with their suppliers to invest in emissions reductions in their Scope 3.
Significant Investment: Whilst not feasible for all brands, GANNI can afford to pay upfront for key technologies that will facilitate (e.g.) energy reductions and carbon savings. These investments support suppliers, who may not be able to invest alone, and will pay back in the long run. After all, with the rising costs of offsets, in our opinion it’s a waiting game before reducing emissions becomes far more cost effective then continuously compensating for them in the short term, not just the long term.
Measurement: To evaluate the success of their projects, GANNI will track on-premise carbon and biodiversity before and after the implementation of any insetting project.
Pilot Projects: GANNI is open about its prioritisation of pilot projects in Europe, that are closer to HQ and where they have more project development experience. The intention is to expand their insetting approach and investments to Asia and beyond in the future. With investment comes risk, but GANNI’s approach to pilots mitigates this as they go.

How are GANNI actually doing this?

A first major step for GANNI has been building a solar plant to support Ramil, a long-standing supplier in Portugal. They’re also ‘working to improve the biodiversity of the premises by planting plants local to the environment and installing bird and bat boxes’, with both insetting projects having been kicked off in Spring this year. This aligns with their Goal 13 - ‘Commit to not working with Stage 1-3 suppliers that use coal generated heat or energy by 2025’ - which is 30% complete.

They’re also reporting on the percentage of annual revenue that they’ve spent on ‘responsibility’ projects. In 2019, it was 0.52%, 2020 saw 0.79% and 2021 saw 0.57%. Aiming to embed this throughout their business, they’ve introduced ‘bridge’ roles. These roles don’t sit directly under the Responsibility team but do centre work around responsibility - like their new ‘Responsible Business Models Manager’, who is focused fully on circular business models.

Less discussed than offsetting, insetting isn’t such a novel approach. Companies like Levi and IKEA have invested heavily in supporting a green energy transition within their respective supply chains (read more here and here). Levi even partnered with the International Finance Corporation to achieve this.

What else are GANNI up to?

Like many of our favourite brands, GANNI isn’t stopping there. With commitments to phase out virgin animal leather, partnerships to reduce textile waste (did you see their latest collaboration with Barbour?), and circular initiatives like their ‘Old + New = Now!’ campaign in partnership with Vestiaire Collective. For their latest collection, 92% of their production volume came from ‘responsible styles’ (where at least 50% of the composition is certified recycled, lower impact or organic). They’re aiming for 100% in the future, after achieving 100% traceability on Stage 1-4 of their supply chain (their Stage 1 and 2 suppliers are publicly listed on the Open Supply Hub). They even did a ‘2022 Wrapped’ on Instagram, summarising their most polluting products and their goals to mitigate this going forward, and are focused on building their stores responsibly using vintage furniture and recycled plastic too (see more here).

Unlike many brands, they also have an external ‘responsibility board’ to hold them accountable and support their work. Interested in learning more? You can view their full 2021 Impact Report here, and their Instagram page @ganni.lab which is dedicated to becoming ‘the most responsible version of ourselves’.

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*GANNI’s solar power project in Portugal. Source: ganni.com*

> In case you missed it

🌱 Carbon Handprints: How IKEA are flicking the switch on renewable energy.