Beyond Value Chain Mitigation
Companies must scale up investment to get the global economy on track to halve emissions by 2030 and achieve net-zero by 2050. The SBTi is developing guidance to support companies to go beyond their science-based targets by channeling additional climate finance towards mitigation activities outside of their value chains.
Guidance for beyond value chain mitigation
Why take action?
According to the Intergovernmental Panel on Climate Change (IPCC), the remaining ‘carbon budget’ for a 50% chance of limiting warming to 1.5˚C is only 500 gigatons CO2. Even under optimistic projections, there is an enormous gap between where we are headed by 2030 and where we need to be. Estimates suggest that annual climate finance needs to increase by at least seven times to meet internationally-agreed climate objectives by 2030. At least $4.3 trillion USD in annual finance flows are needed by 2030. But today, approximately $665 billion USD is available, around 20% of which is deployed by the corporate sector.
SBTi-validated companies are already deploying climate finance towards achieving their science-based targets. However, the SBTi strongly recommends that companies go above and beyond their science-based targets to invest in mitigation beyond their value chains. This is because:
- There is still a significant number of companies without science-based targets
- There are important sources of emissions outside corporate value chains, such as those linked to subsistence agriculture)
- Government policies are not yet sufficiently ambitious to deliver a 1.5°C future
The SBTi’s Corporate Net-Zero Standard calls this activity beyond value chain mitigation (BVCM).
Analysis conducted by Systemiq for the SBTi found that almost 70% of surveyed companies felt that the private sector should be doing more than abatement of value chain emissions. However, they needed guidance on best practice in beyond value chain mitigation activities and investments.
About the project
In response to this call for guidance, the SBTi has initiated a project to publish a Beyond Value Chain Mitigation Guidance Paper in 2023. It will provide recommendations for companies covering the minimum benchmarks for credibility and best practices for transparency. The SBTi will also explore the role of climate claims and other mechanisms for incentivising scale up of private sector climate finance.
To date, the SBTi has taken the following actions in the guidance development process:
- April 2021: Requested proposals for consultancy work on BVCM
- October 2021: Launched the SBTi’s Net-Zero Standard which introduced BVCM
- October 2021: Released the BVCM FAQ v1
- December 2021: Completed BVCM consultancy work and report issued by Systemiq
- August 2022: Published Blog entitled “Going Above and Beyond to Contribute to Societal Net-Zero”
- September 2022: Published Blog entitled “Net-Zero: Urgent Beyond Value Chain Mitigation Is Essential”
- October 2022: Kicked-off BVCM guidance development project
- March 2023: Recruited expert advisory group for BVCM
- June 2023: Public consultation on BVCM (running for six weeks until the end of July 2023)
Provisional Timeline
Project participants
The SBTi is the project lead, manager and convening agent. The Project Team consists of representatives from the SBTi partner organizations plus a secondee from Systemiq. Boston Consulting Group (BCG) and Climate Focus also provided consultancy support.
Stakeholder involvement is possible via the following groups:
Expert advisory group (EAG): The EAG is composed of technical experts from stakeholder organizations and companies interested in investing in beyond value chain mitigation (see here for the terms of reference). These advisors provide technical advice to the SBTi in support of the development of BVCM guidance. Membership of the EAG does not constitute formal endorsement of SBTi products relating to BVCM. The following individuals are part of the BVCM EAG:
- Alexander Farsan, Klarna
- Amir Safaei, World Business Council for Sustainable Development
- Andika Putraditama, Lestari Capital Pte. Ltd
- Anita Otubu, Universal Energy Facility, Sustainable Energy for All
- Anshari Rahman, GenZero
- Bhaskar Singh Karky, The International Centre for Integrated Mountain Development
- Bogolo Kenewendo, The Climate Change High-Level Champions
- Brad Schallert, Winrock International
- Candace Vinke, Verra
- Carlijn Nouwen, Climate Action Platform for Africa
- Chandra Shekhar Silori, Regional Community Forestry Training Center for Asia and the Pacific (RECOFTC)
- Chidi Oti-Obihara, Diolen Consult Ltd
- Daniel Zarin, Wildlife Conservation Society
- Derik Broekhoff, Stockholm Environment Institute
- Diksha Pillay, De Beers Group
- Disha Agarwal, The Council on Energy, Environment and Water
- Donna Lee, Calyx Global
- Duan Maosheng, Tsinghua University
- Elijah Innes-Wimsatt, Conservation International
- Emma Stewart, Netflix
- Gabriel Chaves Barboza, GSS Carbon and Bioinnovation
- Gilles Dufrasne, Carbon Market Watch
- Hilda Galt, Climate Focus
- Hilde Stroot, Oxfam Novib
- Johnny White, ClientEarth
- Juliette de Grandpre, NewClimate Institute
- Karol Gobczynski, Ingka Group, IKEA
- Kelley Kizzier, Bezos Earth Fund
- Kerry Constabile, The University of Oxford
- Keyvan Macedo, Natura & Co
- Kuki Soejachmoen, Indonesia Research Institute for Decarbonization
- Mark Kenber, the Voluntary Carbon Market Initiative
- Meera Atreya, Carbon Direct
- Melissa Gallant, The Nature Conservancy
- Morten Rossé, Systemiq
- Nguyen Phi Hung, IDH, The Sustainable Trade Initiative
- Paola Delgado Luna, 21 HOLISTIK
- Patricia Pinho, IPAM Amazônia
- Paul Vermaak, Climate Bonds Initiative
- Rob Macquarie, Climate Policy Advisor and Researcher
- Robert Höglund, Marginal Carbon AB
- Roberta Barbieri, PepsiCo
- Ronan Hodge, The Glasgow Financial Alliance for Net Zero
- Ruhana Zariwala, Cipla limited
- Simon Petley, UK Government Department for Energy Security and Net Zero
- Stephan Singer, Climate Action Network International
- Tanja Havemann, Clarmondial
- Thiago Chagas, KPMG
- Xiaolu Zhao, Environmental Defense Fund
- Zeke Hausfather, Stripe
Financial support
Financial support for the project has thus far been provided by the Gordon and Betty Moore Foundation.
Resources
- BVCM FAQ v1 published in October 2021
- Report issued by Systemiq in December 2021 which summarizes insights from a survey and interviews and provides an assessment of different approaches companies can take to beyond value chain mitigation
- BVCM blog entitled “Going Above and Beyond to Contribute to Societal Net-Zero” published in August 2022
- BVCM blog entitled “Net-Zero: Urgent Beyond Value Chain Mitigation Is Essential” published in September 2022
- Public consultation document published in June 2023
- Public consultation results published in September 2023
- Corporate survey results published in September 2023
Scarlett Benson provides an overview of BVCM and the public consultation process.
Public Consultation
The public consultation on beyond value chain mitigation will be open from June 19 to July 30, 2023. We welcome your feedback and input and please provide comments on the document through this survey.
Further information on the public consultation is below:
- Public consultation document
- Link to the survey
- PDF of survey questions
- News bulletin
- An overview of BVCM and the consultation process webinar
- Public consultation results published in September 2023
- Corporate survey results published in September 2023
Contact
For enquiries about the beyond value chain mitigation project, email the team at info@sciencebasedtargets.org
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