SBTi: Understanding Beyond Value Chain Mitigation (BVCM)

In an era where climate change poses significant threats to ecosystems and human livelihoods, understanding and addressing greenhouse gas emissions has never been more critical.  

The Science Based Targets initiative (SBTi) has emerged as a leading authority in guiding organizations towards achieving meaningful emissions reductions. One of the key components of SBTi’s framework is Beyond Value Chain Mitigation (BVCM), which encourages companies to look beyond their direct operations and consider their entire value chain. This approach not only drives more comprehensive climate action but also reinforces corporate responsibility in the journey towards sustainability. Through BVCM, organizations can identify opportunities for collaboration and innovation, ultimately contributing to a more resilient and low-carbon future. 

What is Beyond Value Chain Mitigation (BVCM)?

Beyond Value Chain Mitigation refers to the strategies and actions organizations take to reduce greenhouse gas emissions that occur outside their direct operations and supply chains. This approach recognizes that companies have a responsibility to mitigate climate change impacts not only through their own activities but also by influencing emissions from other stakeholders, such as customers, products in use, and downstream activities. 

BVCM extends the scope of traditional emissions reduction efforts by incorporating initiatives that support sustainable practices across various sectors. This could include collaborations with suppliers to promote low-carbon technologies, investments in renewable energy projects, or community engagement programs aimed at enhancing environmental resilience. Ultimately, BVCM strives to create a more comprehensive and effective climate strategy that aligns with broader sustainability goals. 

BVCM’s Goals and Principles

BVCM has 2 main goals [1]: 

• Aim to bring about more immediate solutions for cutting down emissions in the near future. The goal is to reach the highest level of global emissions by the mid-2020s and reduce global emissions by half by 2030. 

• Boost financial inputs to amplify emerging climate solutions and promote actions that facilitate systemic change. This will pave the way to attain worldwide net-zero emissions by the middle of this century. 

In order to accomplish these objectives, a BVCM portfolio must encompass four critical principles: scale, financing need, co-benefits, and climate justice: 

• Scale: Maximizing climate mitigation (lowering abatement costs, avoiding reliance on high-carbon technologies, providing financial support at a regional or landscape level, etc.). 

• Financing Need: It is crucial to secure funding from the private sector to aid countries’ delivery in fulfilling and possibly exceeding their Nationally Determined Contributions (NDCs) towards the Paris Agreement. 

• Co-Benefits: Supporting the SDGs (Provide shared advantages including the ability to adapt, remain resilient, secure livelihoods, ensure water safety, and maintain biodiversity). 

• Climate Justice: The effects of climate change don’t impact everyone equally. Nations with lower economic strength, native communities, and different minority groups are most affected by climate change and hence require substantial assistance. 

The Role of SBTi in BVCM

SBTi’s internal decarbonization framework has been increasingly embraced, with over 4000 businesses validating their emission reduction goals through it by 2023 [2]. Despite this, there is currently a lack of substantial direction on what constitutes a strategy for reducing emissions beyond a corporation’s own supply chain. 

Accordingly, in February 2024, the SBTi unveiled a report titled “Above and Beyond: An SBTi report on the design and implementation of beyond value chain mitigation (BVCM)” [3] aimed at helping businesses design and implement BVCM strategies in line with the Corporate Net-Zero Standard, thus hastening the journey towards global net-zero. 

Simultaneously, the SBTi issued another publication, “Raising the Bar: An SBTi report on accelerating corporate adoption of BVCM” [4]. This report delves into the various motivations for BVCM that the wider climate community can influence, including academic circles, civil society, policymaking bodies, standards agencies, advocacy groups and international organizations. It utilizes SBTi’s research to investigate the challenges and motivations for businesses to adopt BVCM strategies. 

These reports offer insights on how to design and put BVCM into practice, aiming to fast-track its uptake in companies. Nevertheless, in the context of the Corporate Net-Zero Standard, BVCM is proposed as an optimal approach, rather than a mandatory step for approving net-zero strategies. At the moment, the SBTi does not intend to check the validity of BVCM claims, which are still optional. 

Why Do Companies Need BVCM? The Benefits of BVCM

Correctly investing in BVCM can open up numerous chances, lessen future threats and boost lasting value. The viability of BVCM is based on the company’s location, market, and industry, and how much it is affected by climate-related environmental changes. It’s crucial for businesses to consider connected shifts in policy, finance, consumer markets, society and technology. This ensures maximum effectiveness of their BVCM activities. 

According to SBTi, implementing BVCM strategies offers several advantages for companies, including: 

• Secure Access to Finance: Organizations that demonstrate a commitment to sustainability through BVCM can attract investment from environmentally conscious investors and financial institutions focused on responsible lending. 

• Talent Acquisition & Retention: Companies prioritizing sustainability initiatives appeal to a growing workforce that values environmental stewardship, enhancing their ability to attract and retain top talent. 

• Climate Resilience & Risk Management: BVCM helps businesses better manage climate-related risks by promoting sustainable practices that enhance overall resilience within their operations and communities. 

• Social License to Operate: Engaging in BVCM fosters trust and goodwill among stakeholders, including local communities and customers, thereby solidifying a company’s social license to operate. 

• Technology Advancement: BVCM encourages innovation and investment in new technologies that reduce emissions and promote efficiency, positioning companies at the forefront of industry advancements. 

• Brand Differentiation: A strong commitment to BVCM can enhance a company’s brand reputation, distinguishing it from competitors and appealing to a growing consumer base that prioritizes sustainability. 

SBTi’s 4-Step Process to Implement Effective BVCM Strategies

To effectively implement BVCM strategies, companies must follow a systematic approach that not only aligns with their sustainability goals but also addresses the unique challenges presented by their specific operational contexts. Here’s the recommended procedure by SBTi: 

Step 1: Set and Deliver a Net-Zero Target 

• Compile, disclose, and validate a comprehensive GHG emissions inventory. 

• Establish, validate, and disclose a net-zero target in line with SBTi guidelines. 

• Develop and implement a climate transition plan aligned with net-zero goals. 

Step 2: Formulate a BVCM Commitment 

• Identify the business rationale, strategic goals, and duration for the BVCM commitment. 

• Define the scope and extent of the BVCM commitment. 

Step 3: Execute BVCM Initiatives 

• Establish quality standards and guidelines for BVCM activities and investments. 

• Allocate necessary resources and funding for a range of BVCM initiatives. 

Step 4: BVCM Activities and Outcomes Reporting 

• Create a framework for monitoring, reporting, and verifying BVCM activities. 

• Provide annual reports on BVCM activities, investments, and results. 

• Ensure transparency and accuracy in all BVCM-related claims. 

Wrap Up

In summary, BVCM represents a pivotal opportunity for companies to not only contribute to global emission reduction but also to position themselves strategically in an increasingly sustainable marketplace. By aligning their operations with ambitious climate goals, businesses can unlock long-term advantages, foster resilience, and enhance their reputation, ultimately driving systemic change in the fight against climate change. Companies need to act decisively to adopt BVCM strategies, ensuring they remain competitive and responsible stewards of the environment. 

References: 

[1] https://sciencebasedtargets.org/resources/files/BVCM-Reports-Webinar.pdf 

[2] https://sciencebasedtargets.org/news/sbti-scale-up-gathers-pace 

[3] https://sciencebasedtargets.org/resources/files/Above-and-Beyond-Report-on-BVCM.pdf 

[4] https://sciencebasedtargets.org/resources/files/Raising-the-Bar-Report-on-BVCM.pdf