SBTi Releases Two Reports to Push Climate Action Beyond Value Chain
The Science Based Target Initiative (SBTi) released two new reports supporting the design and implementation of beyond value chain mitigation (BVCM) strategies as well as rallying increased action from corporations.
The international organization enabling ambitious climate action from the private sector defined BVCM as a mitigation action or investments that fall outside a company’s value chain, including activities that avoid or reduce greenhouse gas (GHG) emissions from the atmosphere. And companies can deliver BVCM through a “range of instruments,” including through the purchase of carbon credits and direct investments.
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“BVCM is a mechanism by which companies can go above and beyond their science-based targets to accelerate the global net-zero transition by helping other economic and social actors to reduce and/or remove GHG emissions today and by funding activities which can expect to deliver BVCM in the longer term,” the organization said. “It can also be a way for companies to take responsibility for their unabated emissions as they transition to net-zero.”
The two BVCM reports—titled “Above and Beyond” and “Raising the Bar”—utilize a new glossary of key definitions used across SBTi’s resources to “enable greater understanding by stakeholders” as the glossary was developed to give more companies the clarity needed to set climate targets.
“Over the course of many months, the SBTi has worked diligently to bring a systematic, logical approach to the amorphous world of beyond value chain mitigation claims. As art of the expert advisory group, I’ve had the opportunity to learn with the STBi as well as with and from a wide range of contributors—including fellow EAG members and hundreds of participants in the public consultation process,” Daniel Zarin, executive director for forests and climate change at the Wildlife Conservation Society, said. “The resulting report is an important step forward and represents the best available synthesis of expertise on this complex topic.”
Above and Beyond
The “Above and Beyond” report provides ideas to help companies implement BVCM strategies to move toward global net zero.
Given the urgency and scale of the climate crisis, the SBTi encourages all companies to take “immediate and consistent” action to deliver BVCM. As such, the SBTi has established two goals that companies can use to inform the design and implementation of their BVCM strategies.
The first goal is to deliver additional near-term mitigation outcomes to achieve the peaking of global emissions in the mid-2020s and splitting global emissions by 2030. The second goal is focused on driving additional finance to scale nascent climate solutions, enabling activities to unlock the systemic transformation needed to achieve net zero by mid-century globally.
The SBTi also proposed a set of principles for companies to consider when deciding on the “portfolio of activities” to support as they implement BVCM. The four principles are: scale to maximize mitigation outcomes, finance to focus on underfinanced mitigation, co-benefits to support the SDGs and climate justice to address inequality.
And the first step in designing and implementing a BVCM strategy is to set and disclose a validated, net-zero climate target in line with the SBTi’s Corporate Net-Zero Standard, the organization said. This means developing a complete GHG emissions inventory, setting, submitting, validating and disclosing a science-based net-zero target, and creating, disclosing and working toward a net-zero aligned climate transition plan.
The second step is to establish a BVCM pledge by determining the business case and strategic objectives, defining the time period, and defining the scale of the BVCM pledge. Next, one must define quality standards and guardrails for BVCM activities and investments before designing a portfolio of those activities and investments.
The fourth step is to report BVCM activities and outcomes by establishing a BVCM measurement, reporting annually on BVCM activities, investments, and outcomes, and making transparent and accurate BVCM claims.
It’s worth noting that the SBTi doesn’t currently have plans to validate BVCM claims. However, the organization recommends that companies “carefully construct” their BVCM claims as part of their overall BVCM strategy. These claims should meet the general requirements of “high integrity” and “high ambition” environmental claims, and companies should ensure that they’re externally audited or certified.
Raising the Bar
The second report, “Raising the Bar,” complements the first. It explores the incentives for BVCM over which the broader climate ecosystem has influence—think civil society, academia, policymakers and multilateral organizations—and draws upon SBTi research to consider the barriers to the widespread adoption of BVCM in the private sector.
The problem, the report outlines, is that there are an “insufficient” number of companies funding and delivering BVCM consistently and at a scale proportionate to the magnitude of the climate crisis. The “vision forward,” the SBTi wrote, is a critical mass of companies going beyond science-based targets to also fund and deliver BVCM, collectively contributing a “significant volume” of finance and mitigation to address the climate crisis.
By funding BVCM, the organization argued, companies can mitigate physical climate risks and realize opportunities linked to resilience and climate adaptation.
“SBTi’s BVCM Report is a call to action: companies must scale up climate finance. SBTi highlights the importance of transparent BVCM claims,” Lydia Sheldrake, director of policy and partnerships at the Voluntary Carbon Markets Integrity Initiative (VCMI), said. “Companies can now make a VCMI’ Carbon Integrity’ claim and get recognized for accelerating global net zero, by using high-quality carbon credits to go above and beyond science-aligned emission cuts.”
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