How can carbon offsetting be integrated into a credible, measurable procurement strategy?

Carbon offsetting is attracting growing interest within procurement departments, but its use often remains poorly regulated. This article sets out reducing emissions, particularly Scope 3[1] emissions, as the absolute priority, before exploring how to integrate offsetting as a complementary and rigorous lever. Definitions, calculation, hierarchy of action and project selection criteria: a structured method for building a sustainable procurement approach that is credible and measurable.

Contents:

• What is carbon offsetting? Definition and limits to be aware of
• Scope 3: why procurement is at the heart of a company’s carbon footprint
• How do you calculate the carbon offsetting your company's needs?
• Reducing before offsetting: the hierarchy of action to follow
• How can carbon offsetting be integrated into a credible, measurable procurement strategy?

Carbon offsetting has become a ubiquitous expression in CSR discourse. Yet its implementation in procurement strategies often remains vague, or is even misused. The credibility of any approach rests first on genuinely reducing greenhouse gas emissions. Carbon offsets only make sense as a rigorous complement, never as a shortcut to unfounded net zero claims.

What is carbon offsetting? Definition and limits to be aware of

Carbon offsetting is a subject that first requires a precise framework. Before taking action, it is important to understand how carbon offsetting works, what this mechanism really covers and what it cannot do.

Carbon offsetting: what exactly are we talking about?

For businesses, carbon offsetting means financing projects that absorb or avoid greenhouse gas (GHG) emissions equivalent to the amount of emissions it has not yet managed to reduce. This mechanism relies on buying carbon credits on voluntary carbon markets, which are distinct from the regulatory obligations imposed on certain sectors. Offsetting does not mean achieving net zero: the carbon emissions are still released into the atmosphere, and offsetting does not erase their immediate impact on climate change.

What is a carbon offset project?

Offset projects fall into three main families:

• Sequestration and carbon removal, through reforestation and tree planting, forest preservation, soil restoration or direct air capture;
• Avoidance, through the development of renewable energy to replace fossil fuels, or through energy efficiency;
• The destruction of greenhouse gases with a high global warming potential.

The quality and verifiability of these projects vary considerably. Additionality is a fundamental criterion: a project must not have been able to exist without the funding provided. Without this criterion, the credibility of the entire approach is compromised.

Scope 3: why procurement is at the heart of a company’s carbon footprint

Understanding carbon offsetting requires first mapping the company’s actual sources of carbon emissions. This is where the procurement function plays a strategic role.

Scope 3 often accounting for over 80% of emissions: what this means for procurement

The vast majority of a company’s emissions are generated upstream and downstream of its own activities, mainly through its suppliers and purchases. Without involving the value chain, reducing direct emissions remains structurally insufficient. Antoine Compin, Managing Director of Manutan France and Iberia, puts it this way: “Scope 3 represents 80 to 90% of the total emissions linked to your company’s activities. In other words, however much you reduce your own carbon emissions, the impact will remain insufficient without the involvement of the entire value chain.”[2]

How can you map emissions across your supply chain?

Rigorous mapping of supplier emissions relies on collecting data (emission factors, supplier declarations), categorising by product category and prioritising the most carbon-intensive items. A data-driven approach makes the process measurable and defensible to stakeholders. Reducing Scope 3 emissions therefore means that buyers must become genuine drivers of the environmental performance of their supplier portfolio.

How do you calculate the carbon offsetting your company's needs?

Carbon offsetting should not be sized arbitrarily. It stems from rigorous prior work on the carbon footprint assessment and residual carbon emissions.

Carbon footprint assessment and identification of residual emissions

Carbon offsetting can only be calculated after a full carbon footprint assessment, which identifies the emissions that cannot be reduced in the short term. Only these residual emissions, once all reduction levers have been activated, justify the use of carbon offsets. A data-driven CSR policy is essential here to guarantee the traceability and credibility of the volumes offset.

What does carbon offsetting cost? Orders of magnitude and key variables

On the voluntary carbon market, the price of a carbon credit (one tonne of CO2 offset) varies according to the type of project, the carbon standard chosen for certification, the geographical location and the length of the commitment. Forest planting and sequestration projects are generally less expensive than projects destroying greenhouse gases or certified renewable energy projects. These variables directly influence the carbon offsetting budget and must be anticipated in order to reach net zero by 2050.

Reducing before offsetting: the hierarchy of action to follow

Carbon offsetting is only legitimate in a context where emission reductions are already under way. This hierarchy is not a recommendation: it is a condition of credibility.

Prioritising reduction levers: supplier selection, eco-design, logistics

Several practical levers are available to the procurement function:

• Integrating environmental criteria into calls for tender;
• Contractually agreeing carbon reduction targets with suppliers;
• Favouring eco-designed products with a documented carbon footprint;
• Optimising logistics to limit transport emissions.

These actions make it possible to reduce carbon emissions across the supply chain in a structural way. They form the essential foundation of a credible procurement strategy.

When does carbon offsetting become legitimate in a procurement strategy?

Voluntary carbon offsetting, through the purchase of carbon credits, is legitimate when it covers documented residual emissions that are temporarily irreducible, after all available levers have been activated. A parallel reduction roadmap is imperative: offsetting without working to reduce emissions exposes the company to reputational risks and, in certain European jurisdictions, to penalties for misleading commercial practices. Transparent communication on this subject is also demanded by stakeholders in Switzerland, the United Kingdom, Norway and across the European Union.

How can carbon offsetting be integrated into a credible, measurable procurement strategy?

Once the fundamentals are in place, the question becomes operational: how can the purchase of carbon credits and the monitoring of carbon offset projects be structured in practice from a procurement perspective?

What is a carbon offsetting contract?

A robust carbon offsetting contract must specify several essential elements:

• The volume of carbon credits purchased, expressed in tonnes of carbon dioxide equivalent (CO2e);
• The type of project (removal or avoidance) and the associated certification standard;
• The validity period of the carbon credits and the permanence clauses;
• Traceability, reporting and verification arrangements by an independent third party.

Contractual robustness determines the credibility of the approach among internal and external stakeholders, particularly in the context of a CSR audit.

Criteria for selecting a reliable carbon offset project and integrating it into supplier evaluation

Labels recognised at European and international levels, such as the Gold Standard or Verra VCS, guarantee independent verification of carbon offset programmes and the carbon credits they generate. The criteria to check are as follows:

• Additionality: the project would not have existed without external funding;
• Permanence: the benefits in terms of mitigating climate change are lasting and measurable;
• Verification by an accredited third-party body.

These criteria can be transposed into supplier qualification and evaluation processes, notably by building a network of responsible suppliers. Including these requirements in specifications strengthens the overall consistency of the approach.

Manutan expert advice and assistance

Building a sustainable procurement strategy involves many methodological decisions, from the carbon footprint assessment to the selection of carbon offset projects. At Manutan, experts support procurement teams in structuring their approach, validating their evaluation criteria and identifying the most relevant levers for their sector and CSR maturity. This service is available in all Manutan subsidiaries at the date of publication.