As companies align their strategies with net zero goals set by the Science Based Targets Initiative (SBTi), there’s a growing emphasis on addressing emissions beyond their immediate operations. Recently, the organization released long-awaited guidance on this front, known as beyond value chain mitigation (BVCM). This represents an existing opportunity for companies to make significant contributions to broader climate action efforts. Let’s dive into the details.
What is Beyond Value Chain Mitigation (BVCM)?
BVCM, short for beyond value chain mitigation, is a strategy that reaches beyond a company’s immediate operational boundaries to address emissions that happen outside of its direct control. SBTi provides a comprehensive framework for climate action through its net zero standards, within which BVCM is highly encouraged and presented as a meaningful opportunity for companies to showcase an exceptional commitment to sustainability.
Why should companies consider BVCM?
The BVCM guidance signals what the market will be seeking—accountability for emissions beyond the value chain. Following this guidance will position companies well to mitigate investor or regulatory risk while providing a clear framework to expedite their journey beyond net zero and assume a leadership position by investing in the highest quality carbon credits.
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Three strategies to determine credit quantity
The BVCM guidance provides three unique pathways to determine total quantity of credits a company should invest in.
–Ton-for-ton method: In this approach, a company addresses BVCM in proportion to the climate impact of a defined percentage of unabated emissions. For instance, for every 1 tCO2 of unabated emissions, the company delivers 1 tCO2 of BVCM by purchasing carbon credits.
–Money-for-ton method: With this method, a company allocates financial resources toward BVCM by applying a price of carbon to its unabated emissions. For example, for every 1 tCO2 of unabated emissions, the company invests a dollar amount equal to the social cost of carbon into BVCM activities.
–Money-for-money method: In this approach, a company directs funding towards BVCM based on a defined share of its profit revenue. For instance, the company may allocate 1% of its annual profit to BVCM programs.
SBTi recommends employing a blend of ton-for-ton and money-for-ton methods. This entails applying a carbon price to unabated emissions and subsequently retiring carbon credits tied to 50% of unabated emissions on a one-to-one basis. Additionally, the remaining funds are channeled into market scaling activities, ensuring a comprehensive BVCM strategy.
Find the best credits
A money-for-ton method can allow companies to invest in a higher quality of credit. Learn what to look for.
Integrating nature into BVCM strategies
BVCM promotes the integration of nature-based solutions into climate portfolios, including initiatives such as forest conservation and restoration. Pachama provides a platform that connects companies with high-quality projects, facilitating the identification and investment in nature-based BVCM activities that align with their business and sustainability goals with ease.
Furthermore, we utilize advanced technology, such as satellite imagery and AI, to ensure the credibility and openness of carbon mitigation projects. By using these tools, companies can report on their BVCM activities with confidence, demonstrating accuracy in their claims.
For companies seeking guidance on how to purchase carbon credits in line with BVCM standards, we encourage reaching out to our experts for personalized assistance in building a strategy aligned with the principles recommended by the SBTi.
