The Klim-Nestlé carbon insetting project

What is carbon insetting?

Carbon insetting is a strategic approach to reduce Scope 3 emissions by increasing carbon storage within a company’s own supply chain. This method addresses emissions produced both upstream and downstream by implementing projects that are tailored to each company’s specific sustainability goals. Key points include:clude the following:

• Nature-based solutions: Carbon insetting often involves investing in regenerative practices thatsequestration carbon,making it a viable solution for companies looking to meet sustainability targets.
• Tailored projects: Projects are specifically designed to align with the unique needs of the company and its supply chain challenges.

One example of carbon insetting is regenerative agriculture - a farming approach focused on restoring and enhancing the health and vitality of soil, ecosystems, and agricultural communities.

Healthy soil plays a critical role in supporting key business and value chain services, such as:

• Soil productivity
• Water availability and quality
• Supply chain resilience
• Margin stability and long-term profitability
• Climate protection

By investing in soil health through regenerative practices, companies can enhance carbon sequestration, helping them meet both environmental and business goals.

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Nestlé's sustainability targets

Given Nestlé’s sustainability targets - to reduce emissions by 50% by 2030 and achieve net-zero by 2050 - sourcing more ingredients from regenerative farming practices is a significant step towards reaching these goals.

Werkmann stated that Nestlé is aware of how climate change affects its supply chains and the potential challenges it may face in sourcing raw materials for its brands in the future.

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Overcoming challenges in carbon insetting project implementation

Nestlé has set ambitious goals to drive meaningful change in its supply chains, but the specifics of how to implement this plan pose a significant challenge. There were two major obstacles:

Problem 1: Complex supply chains

Supporting regenerative practices is complicated by the indirect connections between large companies and their farmers. Many businesses operate through multilayered supply chains with intermediaries, which hinders direct engagement with farmers and makes it difficult to ensure the consistent adoption of sustainable methods.

Problem 2: Skepticism among farmers

Some farmers express skepticism about large companies' intentions when approached about transitioning to regenerative practices. For instance, Thomas Gäbert, a farmer involved in the Nestlé project, initially voiced concerns: “I was very skeptical about working with a large company on Regenerative Agriculture. They set high targets and have the resources, but I have to consider the risks and additional effort as an individual farmer.”

These two challenges illustrate a broader issue: while companies are eager to support Regenerative Agriculture to meet sustainability goals, they often lack strong connections with farmers, who may be unsure about the risks and rewards of these projects.

That’s where Klim steps in, serving as a critical link between companies and the farmers they rely on.

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Bridging gaps: Klim’s role in carbon insetting projects

Klim serves as the key connector between companies and farmers, facilitating the development of Regenerative Agriculture projects that benefit both parties. In the Klim-Nestlé carbon insetting project, these were the steps to ensure successful collaboration:

Identify and plan

Klim helped Nestlé discover the most promising opportunities for regenerative projects within their supply chain. As a project developer, manager, and MRV provider, Klim identified high-potential regenerative projects, particularly focusing on their dairy suppliers. Together, they mapped out a plan to develop a scalable solution tailored to Nestlé's specific sustainability goals.

Applying practices on the farm level

As a farmer-first organisation, Klim prioritises the needs and concerns of farmers, building trust and encouraging collaboration with larger food companies. In the pilot phase of the insetting project, Klim onboarded 10 farmers, expanding to 26 by 2023, covering 12,000 hectares of regenerative farming. The project aims to scale up to 50 farms in 2024.

To address the skepticism that farmers face, Klim works closely with them through a combination of online and in-person exchanges, such as webinars, workshops, and farm visits. Additionally, Klim offers a farmer-centric digital platform where farmers can track progress, access financial support, and find resources on soil health. These services equip farmers with the necessary tools and information, creating a clear pathway toward scaling Regenerative Agriculture at the farm level.

For the Nestlé project, Klim onboarded farmers to the platform, providing a combination of up to 4 modules selected from various practices, including multi-year forage crops, cover crops, and reduction of fertilisers through legumes.

Building trust and transparency

Klim’s approach fosters trust and transparency, ensuring that both parties’ objectives are met. As Werkmann noted during the presentation, “As a large food company, we have the privilege of working with many innovators, which is how we engaged with Klim. As the project manager, they help us create rapport and build trust with the farmers.”

This collaborative effort helps companies achieve their sustainability goals while benefiting farmers through stable yields, a resilient supply chain, and improved supplier relationships.

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Key outcomes of the Klim-Nestlé project

The collaboration has already produced significant results, contributing to both Nestlé’s short-term and long-term sustainability goals. Major outcomes of the project include:

• Improved long-term security and predictability of the supply chain
• Significant progress towards sustainability targets such as decarbonising supply chain
• Valuable learnings on the scalability of regenerative projects
• Better relationships and increased trust of farmers and suppliers

From the farmers perspective, the benefits are also clear. Thomas Gäbert, reflecting on his experience, noted, “This project shows that it’s not fully the farmer’s responsibility to scale up Regenerative Agriculture, but must happen along the whole value chain. Collaborating with a large company and project experts has paid off for us.”

Through the project, Gäbert has been able to refinance and expand his regenerative practices, reinforcing the shared responsibility between companies and farmers in scaling Regenerative Agriculture.

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Conclusion

The Klim-Nestlé carbon insetting project showcased at the 2024 European Regenerative Agriculture Summit highlights the vital role of collaboration in advancing Regenerative Agriculture. As Robert Gerlach and Philip Werkmann discussed, this initiative not only supports Nestlé's ambitious sustainability targets but also fosters stronger relationships with farmers.

This partnership demonstrates the potential to bridge the gap between corporate goals and on-the-ground practices, paving the way for a more resilient food system. As we move forward, the insights from the European Regenerative Agriculture Summit remind us that scaling these efforts is essential for achieving a sustainable future, benefiting both our environment and agriculture.

Klim helps you develop a carbon insetting projects tailored to your sustainability targets. Visit our insetting page for more information and to get in touch with our team of experts.