The urgency of addressing the climate crisis has never been greater. As global temperatures continue to rise and the impacts of climate change become more severe, businesses and organisations must step up their efforts to reduce greenhouse gas emissions. This requires a dual approach: ambitious internal decarbonisation and robust action beyond their value chains.
Companies that go beyond their value chain to contribute in the climate action are engaging in what is known as Beyond Value Chain Mitigation (BVCM). This involves mitigation efforts or investments that fall outside a company's direct operations and supply chain, such as financing projects that avoid, reduce, or remove greenhouse gas emissions globally. These actions are crucial for accelerating the overall transition to a net-zero economy and are intended to supplement, not replace, a company's primary responsibility to reduce its own emissions in line with science-based targets
Beyond Value Chain Mitigation: Origins and Evolution
The Science Based Target Initiative (SBTi) is the primary body that has formalised and actively promotes the concept of Beyond Value Chain Mitigation (BVCM). SBTi first introduced the recommendation in its 2021 Corporate Net-Zero Standard and then expanded on the idea in its 2024 reports. According to SBTi, the BVCM is an important resource for companies to deal with the risk of climate change and enhance their long-term impact. Moreover, with contributions from the private sector, debt-free financial resources can be raised for sustainable and low-carbon growth.
The goals of BVCM are to deliver near-term mitigation outcomes that halve global emissions by 2030 and to help scale up budding climate solutions by providing additional financial support, enabling the systemic transformation needed to achieve net-zero emissions globally by 2050.
SBTi's 4-step module to design and implement high-integrity Beyond Value Chain Mitigation (BVCM) strategies:
1. Setting of Net-Zero Target and working towards delivering it: This foundational step encourages the company to have a clear idea about the GHG emissions and further develop and disclose a full GHG inventory. Companies must set and submit net-zero targets for validation by the SBTi, publicly disclose them, and revisit them every five years. A time-bound action plan highlighting how the organisation will work towards a net-zero aligned climate transition plan should be developed and revised annually.
2. Establishing a BVCM Pledge: A pledge where companies define their commitment to Beyond Value Chain Mitigation. This involves determining the business case and strategic objectives for BVCM, integrating them into their climate transition plan. Companies should define a forward-looking pledge period of five years or more, with regular reviews for alignment and impact. The scale of the pledge should be determined by applying a science-based carbon price to unabated emissions to set a financial budget. A recommended best practice is to use a portion of this budget to deliver quantified BVCM outcomes equivalent to at least 50% of the company's unabated emissions.
3. Taking Action to Deliver BVCM: Companies should define quality standards, including additionality, permanence, and avoidance of leakage and double counting. Along with, some safeguarding principles to prevent adverse impacts. Companies should allocate finance and resources to activities that align with the BVCM Goals and Principles, and transparently disclose this alignment to the public.
4. Reporting BVCM Activities and Outcomes: This emphasizes transparency and accountability for BVCM efforts. Companies should establish an MRV (Measurement, Reporting and Verification) framework for mitigation outcomes from BVCM funding, relying on existing standards and third-party verification. Annual, transparent reporting on deployed finance, mitigation interventions, and co-benefits is essential, with separate reporting for emissions reductions and removals.
In its February 2024 report, the SBTi examines the incentives and barriers to broader private sector adoption of BVCM, aiming to accelerate corporate engagement. One of the core problems identified by the SBTi report is that not enough companies are contributing to the funding and delivering BVCM, considering the magnitude of the climate crisis and the need to tackle it.
Barriers to BVCM:
Key barriers blocking the widespread adoption of Beyond Value Chain Mitigation (BVCM) include the pervasive fear of greenwash accusation, stemming from concerns that BVCM efforts might be misconstrued as merely offsetting internal emissions, thereby posing significant reputational risks. A closely related challenge is the lack of credible BVCM claims, as companies grapple with how to transparently and accurately communicate their BVCM activities amid growing regulatory scrutiny—even as the landscape shifts toward 'contribution claims'. Moreover, a lack of clear understanding of the economic benefits of engaging in BVCM and the absence of standardized guidance on best practices and minimum standards for BVCM have created uncertainty. Although new reports from the SBTi and VCMI aim to address this.
BVCM: Breaking Free from Outdated Approaches
For too long, the corporate world has relied on outdated "carbon neutrality" models that have often fallen short in delivering meaningful climate action. These models frequently make unsubstantiated claims and focus more on offsetting than on addressing the root causes of emissions. It’s time for a paradigm shift.
At ClimateSeed, we are proud to have co-signed, in collaboration with leading organisations, such as; Carbon Market Watch, Gold Standard and WWF International, a recent joint statement on the importance of credibly funding beyond value-chain climate action. This initiative provides a clear framework for companies to responsibly contribute to climate solutions while upholding transparency and integrity.
The joint statement, initiated by Carbon Market Watch and supported by dozens of stakeholders from academia, civil society, and the private sector, including ClimateSeed, outlines a clear alternative to these ineffective practices. It emphasises that companies must prioritize internal decarbonization while also funding high-quality climate action beyond their value chains. This approach ensures the delivery of tangible benefits for the climate and sustainable development.
The Five-Step Model for Beyond Value Chain Mitigation
The joint statement supported by ClimateSeed and initiated by Carbon Market Watch, proposes that while prioritising its decarbonization in line with a 1.5C° trajectory, a company should:
- Calculate and disclose its GHG footprint, including scope 1, 2 and 3 emissions;
- Determine a budget to be allocated to beyond value-chain climate action (e.g. through an internal carbon price, a share of revenues, etc.);
- Undertake due diligence to decide on a beyond value-chain climate portfolio that will direct finance to the most impactful climate initiatives;
- Finance the identified initiatives;
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Publicly communicate about each of the 4 steps, clearly separating beyond value-chain funding from internal decarbonization efforts.
The details of how to operationalize each step can and should be refined, and there may be nuances in how they are implemented. But this can be done by each actor, with transparency and integrity, as many of the undersigned organizations have been practicing.
Driving Change through BVCM
The support for this statement reflects a growing consensus among stakeholders. Nearly 50 organizations have endorsed the call for credible BVCM practices, signaling a collective commitment to meaningful climate action. Among the signatories are prominent actors in the voluntary carbon market, such as Gold Standard and Compensate Foundation, which have also emphasized the need to move away from misleading "carbon neutrality" claims.
By adopting credible alternatives, companies can not only enhance their climate impact but also build trust with stakeholders and drive the green transition.
ClimateSeed’s Commitment: Credibly Funding Beyond Value Chain Climate Action
At ClimateSeed, we are dedicated to empowering organizations in their decarbonization journeys. Beyond helping our partners measure and reduce their carbon footprints, we actively support them in funding impactful carbon projects that avoid or sequester carbon emissions beyond their value chains. Signing this joint statement aligns with our mission to champion transparent, high-quality climate action.
We encourage other organizations to join us in embracing BVCM. Together, we can create a future where businesses lead the way in addressing the climate crisis with integrity and ambition.
To learn more about how your organization can get involved in this change, please, contact us at ClimateSeed.
