Carbon extra credit? Why BVCM should be more than a bonus point

Last week saw the arrival of two new reports from the Science-based targets initiative (SBTi) on beyond value chain mitigation (BVCM). Intended to be read together, the first, focused on design and implementation, makes recommendations to help companies develop BVCM strategies while the second explores the barriers and incentives for corporate engagement.

Carbon extra credits

The SBTi defines BVCM as ‘a mechanism through which companies can accelerate the global net-zero transformation by going above and beyond their science-based targets.’ 

In other words, BVCM is climate mitigation that is not related to a company’s own value chain activities but still creates positive impacts for the climate, biodiversity and people. 

This all sounds great, right? In many ways, yes. I think the SBTi’s contributions to BVCM are broadly positive. 

However, generally speaking, the SBTi considers BVCM a ‘nice to have’ – something to be implemented only after a company’s value chain has been thoroughly decarbonized. It is presented as something laudable but unnecessary, the carbon equivalent of earning extra credit on an exam, with the further caveat that you can only get the extra credit if you score 100% on the main exam.

The first of the SBTi’s new reports states:

“At the time of publication, the SBTi does not have plans to validate BVCM claims, particularly given that others are already working to define BVCM-related claims, including the Voluntary Carbon Market Integrity Initiative (VCMI).”

The SBTI’s position on BVCM is not without implication. It means that there is really no incentive whatsoever for companies to do BVCM, especially given that achieving a perfect 100 percent score in today’s decarbonization ‘exam’ is already incredibly difficult. 

Therefore, at least as currently envisioned by SBTi, BVCM will remain a niche and limited set of activities undertaken by only the most motivated sustainability professionals.

Un-meetable criteria 

This is not to dismiss the importance of within value chain mitigation. Faced with climate catastrophe, it is essential that companies remove emitting activities from operations. But although there is scope for substantial progress to be made, at the moment it is virtually impossible to score 100 percent on any emission reduction ‘exam’.

Many companies simply don't have the data available to track supply chains all the way down to the producer. One example is multinational food brands, many of which  struggle to gather basic financial data from their franchises. Knowing the conditions under which their suppliers provide inputs for pizzas, burgers and chicken nuggets is, at best, complex. Much of the time, understanding the intricacies of a supply chain is near-impossible, at least with the knowledge base we have today.

Given these realities, it should not be a surprise that many sustainability leaders  look at the SBTi and feel lost. As a result, many companies sit outside of the climate action tent. This is not necessarily by choice; rather, they are put off by a seemingly insurmountable challenge related to knowing who is in the supply chain, being able to measure each contributing supplier’s GHG footprint and having the ability to influence their actions.

Replacing rigidity with flexibility 

To bring these companies in from the cold, we should consider how to provide them with greater flexibility to meet ambitious net zero targets. At a time of urgent climate crisis, we cannot afford to force willing ‘decarbonizers’ to rigid requirements that end up keeping them from taking action. So, what does flexible climate action look like? One logical option would expand the scope of what is acceptable and find ways for companies to to take climate action outside of the current constraints. In other words, we need to build an on-ramp for climate action.

Beyond measuring a company’s footprint and setting a corporate target, actions which are already contemplated under SBTi guidance, why not give credit to companies who purchase and retire high-quality carbon credits (within reason). If, for example, we let companies meet 20% of their mitigation target with high-quality carbon credits, and ratchet that down over time, we would create a lot more incentives for companies to take action today.

I will be the first to say that developing carbon credits as a credible mitigation tool has not been easy. But a great many impressive, professional people are working consistently to bring improvements. Indeed, the ICVCM and the VCMI both herald a new era for the voluntary carbon market – one of confidence, transparency, and increased credibility. Let’s not forget that carbon credits offer companies a clear, ever-evolving option with which to create positive impacts for people, nature and the climate.  

In this new chapter of voluntary climate action, I welcome its potential for increased impact. However, rigidity will only dissuade people from taking action. Flexibility, on the other hand,  will help companies meet ambitious climate targets and get them inside the climate action tent. Going forward, we should be rewarding those who work to decarbonize their own value chains and engage in BVCM as a way to . And I do mean ‘and’ – the world desperately needs both, as well much more climate action than what we are seeing today.