Regenerating our supply chains through multi-stakeholder and multi-sector insetting partnerships A case for resiliency between brands and farmers

Nitesh Dullabh

Feb 68 min read

As the world transitions toward more sustainable and regenerative practices, insetting has emerged as a critical strategy for brands to embed sustainability directly into their supply chains. Insetting is a sustainability strategy where brands invest in climate-positive projects within their own supply chains to reduce their environmental and social footprint while improving ecosystem resilience and supporting local communities. Through brand partnerships with farmers and other multi-sector stakeholders, insetting delivers tangible benefits in reducing carbon emissions, improving farmer livelihoods, and strengthening supply chain resilience. This paper explores insetting partnerships in both global and U.S.-specific contexts, showcasing their financial, social, and environmental impacts.

Man using watering cans to water crops. — Source: Pixabay.com

Problem Statement—What are some of our major concerns?

Agricultural supply chains in the U.S. and worldwide face overlapping challenges:

Environmental Impact: Agriculture is responsible for approximately 10% of GHG emissions in the U.S. (EPA, 2022), driven by practices such as monocropping, soil degradation, and pesticide use.
Economic Pressure on Farmers: American farmers experience tight profit margins due to price volatility, rising costs, and climate impacts, with nearly 50% of U.S. farmland owned by farmers aged 55 or older (USDA, 2021).
Corporate Sustainability Goals: U.S. and global companies increasingly seek to align with Science-Based Targets (SBTi) and consumer demand for sustainable and regenerative products, yet many struggle to reduce Scope 3 emissions within their supply chains.

Insetting offers a scalable solution by addressing these issues holistically, creating co-benefits for brands, farmers, and the environment

Paper Objectives:

Analyze the impact of insetting initiatives with measurable financial, social, and environmental outcomes.
Highlight successful U.S. case studies alongside global examples.
Offer recommendations to scale insetting initiatives for broader industry adoption.

Research Questions:

How do insetting projects create measurable environmental, financial, and social value in the U.S. context?
What lessons from global and U.S.-based insetting programs can be used to scale initiatives across industries?
How do multi-stakeholder partnerships foster systemic change in supply chains?

Methodology:

The analysis below draws on secondary data, including corporate sustainability reports, academic literature, and real-world case studies. A mixed-method approach is used, combining quantitative metrics (e.g., carbon sequestration, income increases) with qualitative insights (e.g., farmer empowerment, biodiversity restoration).

Analysis and Discussion:

A. The Role of Multi-Stakeholder Partnerships in Insetting

Insetting requires collaboration among brands, farmers, NGOs, governments, and technology providers. In the U.S., brands often partner with regenerative agriculture initiatives, local cooperatives, and environmental organizations to implement projects at scale. These partnerships:

1. Provide Financial and Technical Support: Brands fund upfront costs for regenerative practices like cover cropping and reduced tillage.

2. Leverage Technology: Tools like satellite monitoring, soil carbon measurement, and blockchain ensure traceability and transparency.

3. Build Farmer Trust: Long-term partnerships ensure fair pricing, risk-sharing/taking, and technical assistance for farmers.

4. Brands in discussion with Farmers share their sustainability commitments and provide funding, expertise, and market access

5. NGOs, Governments and Technology providers offer capacity-building, policy support, and frameworks for monitoring impacts.

Partnerships enable the scalability of insetting initiatives while ensuring that benefits are equitably distributed across stakeholders.

B. Case Studies with Measurable Impacts

USA Case Studies	International Case Studies
General Mills Regenerative Agriculture Initiative (Kansas, U.S.) Project Timeline - Start Date: 2018 \| Target End Date: 2030 Project Overview:General Mills launched its regenerative agriculture initiative to engage with U.S. wheat farmers in Kansas and the Northern Great Plains. The program provides financial incentives and technical training to help farmers implement practices like cover cropping, rotational grazing, and reduced tillage. Quantitative Results: Carbon Sequestration: By 2022, participating farms sequestered over 100,000 metric tons of CO₂ equivalent through improved soil practices. Financial Impact: Farmers saved an average of $40 per acre annually on fertilizer costs due to healthier soils (General Mills, 2023). Yield Stability: Regenerative practices reduced crop losses during drought years by 15–20%, enhancing farm profitability. Qualitative Insights: Farmers reported increased biodiversity, with more pollinators and wildlife returning to their fields. Partnerships with NGOs like The Nature Conservancy helped expand technical training programs and build trust.	L’Oréal’s Shea Butter Sourcing Initiative (Burkina Faso) Project Timeline - Start Date: 2010 \| Target End Date: Ongoing Project Overview:L’Oréal has partnered with 30,000 women farmers in Burkina Faso to sustainably source shea butter, a key ingredient in its beauty products. The initiative emphasizes women’s empowerment, biodiversity restoration, and sustainable harvesting. Quantitative Results: Income Growth: Women’s earnings increased by an average of 50%, helping lift many out of poverty. Cost Savings: Removing intermediaries reduced costs for both L’Oréal and the farmers. Land Restoration: Agroforestry practices restored 2,000 hectares of degraded land. Qualitative Insights: Access to financial literacy programs and healthcare improved overall quality of life for participants. Women farmers reported increased social standing and economic independence within their communities.
Danone’s Horizon Organic Dairy Initiative (Colorado, U.S.) Project Timeline - Start Date: 2020 \| Target End Date: 2035 Project Overview:Danone North America partnered with Horizon Organic dairy farmers in Colorado to transition to regenerative agriculture practices, including rotational grazing, composting, and reducing methane emissions. Quantitative Results: Carbon Reduction: Methane emissions dropped by 20% across participating farms by 2023, with a goal of achieving net-zero emissions by 2035. Increased Revenue: Farmers earned up to 15% higher profits through premiums paid for sustainable milk production. Soil Health: Improved soil organic matter by 10%, enhancing water retention and reducing irrigation needs. Qualitative Insights: Farmers highlighted greater resilience to extreme weather events, such as drought and heavy rainfall, due to improved soil health. Danone provided long-term contracts to reduce financial uncertainty for farmers during the transition period.	Danone’s Livelihoods Carbon Fund (Senegal) Project Timeline - Start Date: 2008 \| Target End Date: Ongoing Project Overview:Danone launched the Livelihoods Carbon Fund (LCF) to invest in agroforestry and regenerative agriculture projects. In Senegal, the LCF collaborated with local communities to restore 8,000 hectares of degraded land through agroforestry. Quantitative Results: Carbon Sequestration: Over 1.8 million tons of CO₂ equivalent sequestered to date. Farmer Income Growth: Agricultural productivity increased by 30%, resulting in an additional $2.5 million in income within the first five years (2008–2013). Tree Planting: Approximately 6 million trees were planted, including fruit-bearing varieties. Qualitative Insights: Enhanced soil fertility reduced reliance on synthetic fertilizers. Migration patterns shifted as farming communities became more resilient to climate impacts.
Nespresso’s AAA Sustainable Quality™ Program (California, U.S.) Project Timeline - Start Date: 2015 \| Ongoing Project Overview:Nespresso expanded its global AAA Sustainable Quality™ Program to U.S.-based coffee farms in California. The program focuses on sustainable water usage, soil management, and improving coffee quality. Quantitative Results: Water Savings: Farmers reduced water use by 30% through drip irrigation and water recycling technologies. Premium Prices: Participating farmers earned 20–30% higher revenues by selling AAA-certified coffee to Nespresso. Carbon Reduction: Shade tree planting offset approximately 50,000 metric tons of CO₂ by 2022. Qualitative Insights: Farmers benefited from continuous training and access to global coffee markets, increasing their economic stability. Shade tree planting enhanced local biodiversity, supporting pollinators critical to coffee production.	Nespresso’s AAA Sustainable Quality™ Program (Colombia) Project Timeline - Start Date: 2003 \| Ongoing Project Overview:Nespresso’s AAA Sustainable Quality™ Program engages over 120,000 coffee farmers globally to improve coffee quality, implement climate-smart agricultural practices, and ensure long-term market access. Quantitative Results: Increased Farmer Income: Farmers earned 30–40% more income compared to those outside the program. Carbon Reduction: Shade trees planted on coffee farms reduced emissions by 40% in key regions. Yield Stability: Coffee farmers reported 30% fewer losses due to climate variability. Qualitative Insights: Long-term contracts provided financial security and reduced supply chain volatility. Women farmers gained access to leadership training, contributing to gender equity within farming communities.

Challenges in Implementing Insetting:

Despite its transformative potential, insetting faces several challenges that can hinder its scalability and effectiveness:

Stakeholder Alignment:

Misaligned Objectives: Brands, farmers, and NGOs often have different priorities. Brands may focus on carbon reduction as part of their Scope 3 goals, while farmers prioritize income, NGOs on technical training, and Governments focus on food security. Aligning these goals requires careful negotiation and long-term commitment.
Fragmented Supply Chains: For companies like L’Oréal sourcing shea butter, fragmented supply chains involving multiple intermediaries make it harder to implement and monitor insetting initiatives effectively.
Financial Barriers
High Upfront Costs: Transitioning to regenerative practices often requires significant investment in equipment, training, and new techniques.
·Access to Capital for Farmers: Smallholder farmers often lack access to affordable financing, making it difficult for them to adopt sustainable practices.

Measurement and Monitoring

Complexity of Measuring Carbon Impact: Accurately quantifying the carbon sequestration benefits of insetting initiatives requires advanced tools and methodologies. For example, General Mills’ initiative in Kansas uses soil carbon sampling and satellite data, but the process can be time-consuming and costly.
Lack of Standardized Metrics: There is no universally accepted framework for measuring the social and environmental impacts of insetting, making it difficult to compare projects or demonstrate ROI to stakeholders.
Farmer Engagement
Behavioral Resistance: Farmers may be hesitant to adopt new practices due to a lack of trust or familiarity with regenerative methods. In the Nespresso AAA Program, some farmers initially resisted switching to shade-grown coffee because of concerns about yield impacts.
Risk of Market Dependency: Programs that offer premium prices or financial incentives can unintentionally create dependency, making farmers vulnerable if brand priorities change.
Policy and Regulatory Barriers
Lack of Policy Support: In many regions, there are insufficient government incentives to encourage sustainable practices. For instance, U.S. farmers participating in regenerative programs often lack access to subsidies that could offset transition costs.
Regulatory Uncertainty: Changing regulations around carbon credits and sustainability reporting create challenges for companies looking to implement long-term insetting strategies.
Scalability
Regional Limitations: Techniques that work in one geography or climate may not be directly transferable to another. For example, cover cropping in the U.S. Midwest differs significantly from agroforestry in Senegal.
Limited Adoption: Even successful pilots often struggle to scale due to resource constraints or a lack of infrastructure for replication.

Recommendations:

To overcome these challenges, brands and stakeholders must adopt the following strategies:

Foster Stakeholder Collaboration:Align the goals of brands, farmers, NGOs, and governments through clear communication, equitable benefit-sharing models, and long-term commitments.
Establish Financial Mechanisms:Create blended finance models that combine corporate funding with loans, subsidies, insurance and carbon credits to reduce financial barriers for farmers.
Develop Standardized Metrics:Collaborate with initiatives like the Science Based Targets initiative (SBTi), Carbon Disclosure Project, (CDP) and Global Reporting Initiative (GRI)to create universally accepted frameworks for measuring insetting impacts.
Invest in Farmer Education:Conduct training programs to build trust and encourage the adoption of sustainable practices. Nespresso’s AAA Program demonstrates how ongoing support can reduce resistance and build long-term partnerships.
Strengthen Policy Support:Advocate for government incentives, such as tax credits and grants, to support regenerative agriculture and carbon sequestration within supply chains.
Leverage Technology:Use digital tools like blockchain for traceability and transparency, satellite monitoring for carbon tracking, and mobile apps for farmer engagement to address scalability and monitoring challenges.
Engage NGOs and Local Communities: Collaborate with organizations like The Nature Conservancy, Conservation International, and farmer cooperatives to ensure inclusive implementation.

Outputs of Insetting:

Carbon Reduction: Projects like General Mills’ Kansas initiative have sequestered over 100,000 metric tons of CO₂ equivalent annually.
Improved Farmer Incomes: Nespresso’s AAA Program boosted farmer revenues by 20–40% through premium pricing.
Resource Efficiency: Water use was reduced by 30% in Nespresso’s California coffee farms.
Biodiversity Gains: Millions of trees planted in insetting programs enhance ecosystems, serve as carbon sinks and support pollinators.

Outcomes of Insetting:

Environmental Sustainability: Insetting restores degraded land, enhances soil health, and promotes biodiversity, reducing climate risks for farmers and brands alike.
Social Empowerment: U.S. and global farmers report higher and more stable incomes, even in the face of climate-related challenges.
Corporate Value: Brands improve supply chain resilience and impact, align with ESG goals, and gain consumer trust and loyalty through sustainable and regenerative sourcing.

Conclusion:

Insetting offers a transformative tool and pathway for U.S. and global brands to achieve their sustainability commitments while benefiting farmers and ecosystems. While the road to scaling insetting is fraught with challenges, the case studies showcase the measurable financial, environmental, and social impacts of such efforts.

Insetting relies on collaboration across brands, farmers, NGOs, governments, and technology providers. These partnerships provide and enable the financial, technical, and policy frameworks necessary to achieve sustainability goals. By scaling insetting initiatives, brands can build resilient and trustable supply chains that support people, planet, and profits in equal measure.

A flourishing field with farmers — Source: Pixabay.com

References:

General Mills Regenerative Agriculture Report, 2023
Danone Livelihoods Carbon Fund Report, 2022
Nespresso AAA Sustainable Quality™ Program Overview, 2022
The Nature Conservancy Agricultural Initiatives, 2023
EPA U.S. Greenhouse Gas Emissions Report, 2022
USDA Agricultural Census Report, 2021

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