Executive summary
As food companies expand their Scope 3 decarbonization efforts, they face increasing pressure to demonstrate that their value-chain inset programs deliver credible, additional greenhouse gas (GHG) reductions. In our previous paper, Additionality Considerations for Food Companies, we outlined the challenges companies encounter when applying traditional offset-style additionality concepts to supply chain interventions. This follow-up paper builds on that foundation, offering practical guidance for how companies can navigate ambiguity in inset standards, strengthen program integrity, and prepare for an increasingly rigorous carbon accounting landscape.
Unlike offsets, where registries provide detailed, project-specific requirements, value chain inset programs operate within a more flexible framework under the Greenhouse Gas Protocol. This flexibility allows food companies to tailor approaches to their supply chains, but it also increases the risk of misestimating project impacts, facing public scrutiny, or misaligning program outcomes with inventory accounting. As inset markets evolve, companies must determine how much rigor to apply today while anticipating future expectations from regulators, assurance bodies, and civil society.
A central challenge lies in reconciling inventory accounting with project-based accounting. Most food companies manage these systems separately, and the assumptions embedded in industry emissions factors often lack clarity on existing practice adoption rates. Without integrating supplier-level data across both systems, companies may struggle to determine whether a project meaningfully advances progress toward inventory targets or risks double counting. Closing this gap requires improved data architecture, stronger supplier engagement, and intentional program design.
Project baseline procedures present another area where companies must make informed choices. The Greenhouse Gas Protocol allows significant latitude in how baselines are defined, justified, and monitored. While this adaptability is necessary for diverse agricultural systems, it produces uneven methods across the market and raises transaction costs. Carefully evaluating baseline assumptions and ensuring they reflect comparable and realistic counterfactuals is essential to building confidence in inset outcomes.
Looking ahead, food companies have an opportunity to help shape a more coherent, efficient, and trusted inset ecosystem. Industry-wide collaboration on data standards, quantification models, and program methodologies will reduce variability, lower costs, and strengthen confidence among producers, auditors, and downstream buyers. Emerging efforts, such as the U.S. dairy industry’s partnership with the RuFaS model, demonstrate how shared technical infrastructure can advance transparency and improve emissions factor accuracy at scale.
Ultimately, delaying action carries significant risks, including missed reduction opportunities, weaker supplier relationships, and vulnerability to tightening regulation. Companies that invest early in data capabilities, cross-functional alignment, and rigorous but scalable inset program design will be best positioned to meet climate commitments while building resilient, future-proof supply chains.
This paper outlines practical steps to chart a path through inset ambiguity today, while helping shape the standards and systems that will define high-integrity value chain decarbonization in the years to come.