TL;DR: Beyond value chain mitigation (BVCM) is a key component of the Science Based Target initiative’s (SBTi), Corporate Net-Zero Standard.
This leading corporate climate action framework guides companies in reducing their greenhouse gas (GHG) emissions towards net-zero to meet globals climate goals.
BVCM allows businesses to contribute to climate action beyond their direct operations, playing a vital role in achieving the targets set out in the Paris Agreement.
Introduction to Beyond Value Chain Mitigation
The science is clear: we’re dangerously close to exceeding the critical 1.5°C global warming limit.
Businesses must act now to significantly reduce emissions to keep global temperature rise below 2°C, with a target of limiting it to 1.5°C.
However, current actions fall short, leaving a substantial gap between what’s being done in terms of mitigation and climate finance and what’s needed to mitigate climate change effectively.
To bridge this gap, business leaders must adopt a robust, science-based framework for setting net-zero targets.
Companies are encouraged to achieve peak of emissions by 2025, halve emissions by 2030, and reach net-zero before 2050. Beyond these direct actions, businesses should invest in Beyond Value Chain Mitigation initiatives, such as forest restoration and protection, clean energy expansion, and carbon removal technologies, to further drive climate action.
What is Beyond Value Chain Mitigation?
Beyond Value Chain Mitigation (BVCM) is referred to as ‘climate action or investments that fall outside a company’s value chain’. In other words, this means pushing finance towards projects that reduce or remove greenhouse gas emissions (GHG), while continuing to reduce emissions within the company in line with latest science.
In the mitigation hierarchy outlined by the SBTi, companies are guided through a structured approach to create an effective climate strategy. This process starts with setting near-term and long-term science-based targets (SBTs) to directly reduce emissions within their operations and value chains.
Achieving these targets is crucial, and robust strategies are needed to ensure success. Beyond Value Chain Mitigation (BVCM) serves as a crucial, complementary step in this process.
BVCM can include purchasing carbon credits to take responsibility for unavoidable emissions, provided this doesn’t hinder a company’s own decarbonization efforts.
By investing in BVCM, companies contribute to environmental protection, create positive social impacts, and support long-term sustainability. For instance, investing in nature-based solutions like tree planting benefits both the climate and local communities.
Purpose of BVCM: why should businesses invest in it?
In today’s business landscape, the pressure from stakeholders to take meaningful climate action is mounting. Delaying action is no longer an option, as companies risk falling behind in an increasingly competitive market.
By investing in BVCM, your company demonstrates a serious commitment to addressing climate change, which can significantly enhance your brand’s reputation.
However, it is more than just a tool for positive environmental impact—it’s a strategic advantage.
Integrating BVCM into your climate strategy helps your company meet climate targets, which is essential for maintaining compliance with regulations and aligning with global climate goals. Additionally, it can help attract and retain top talent, as employees increasingly seek to work for organizations that prioritize sustainability. Furthermore, BVCM can draw in new customers and fulfill investor expectations for responsible and transparent climate action, positioning your company favorably in a market that values sustainability.
On a broader scale, it allows businesses to play a vital role in closing the gap between current climate efforts and the goals needed to achieve net-zero. It demonstrates a company’s responsibility for their environmental impact, which is increasingly recognized as part of a business’s social license to operate.
Embracing BVCM is not just the right thing to do – it’s a smart move that underscores your commitment to the planet.
Source: SBTi report: Above and Beyond
4 Principles and examples to implement BVCM into your climate strategy
BVCM covers climate solutions that help to mitigate climate change outside your value chain. SBTi provides the following **4 guiding principles **for companies to consider toward impactful and high-integrity BVCM activities:
Scale: Maximizing Mitigation Impact
Prioritize BVCM activities that offer substantial emissions reductions per dollar spent. Invest in high-quality, verified carbon credits and scalable initiatives like forest restoration or renewable energy generation. This ensures a significant and lasting impact on global sustainability.
Targeting Underfinanced Mitigation
Focus resources on areas lacking sufficient private sector funding, such as early coal phase-outs and ecosystem restoration. Investing in these high-risk, underfunded sectors helps bridge critical funding gaps and achieves meaningful climate results.
Supporting Co-Benefits and SDGs
Align BVCM investments with broader societal goals, including the UN Sustainable Development Goals (SDGs). Support nature-based solutions like forest management and agroforestry, which offer benefits beyond climate mitigation, such as protection of biodiversity and community resilience.
Promoting Climate Justice and Equity
Channel BVCM funding towards low-income and vulnerable regions that face the greatest climate risks. Ensure that investments benefit marginalized groups, uphold land rights for Indigenous communities, and support a just transition to net-zero. This approach promotes fairness, inclusivity, and human rights while advancing global climate objectives.
How to finance BVCM as a business
The most common approach for businesses to finance BVCM happens through the funding of certified carbon projects (e.g., carbon credits). Financing BVCM, however, can be approached in different ways, depending on a company’s structure and preference.
Here are the 3 most common approaches for effectively funding climate projects:
Tonne-for-Tonne This approach is similar to carbon offsetting or neutralizing your emissions. It means that companies determine their required investment based on the market price per carbon credit and matching it with your company’s unabated emissions over a specific period.
For example, if you emit 500 tons of CO2e in a year, you will purchase 500 carbon credits. We encourage businesses to adopt the Oxford Offsetting Principles to ensure that offsetting contributes effectively to climate goals.
Money-for-Tonne This method involves setting an internal carbon price within your organization, based on the "polluter pays" principle. The required investment is determined by the social cost of carbon and your company’s unabated emissions (e.g., €100 per tonne of emissions).
Money-for-Money This last approach links climate funding to financial performance rather than emissions. For example, companies might allocate a percentage of their annual profits to BVCM initiatives (e.g., 1% of your annual turnover), supporting activities like R&D in emerging climate technologies that have unquantifiable but forward-looking mitigation outcomes.
How can Regreener help?
Regreener offers best-in-class climate projects that make real positive impact on our planet.
Our projects mainly include nature-based solutions, like tree planting, agroforestry, rainforest protection, mangrove restoration (blue carbon), and coral transplantation. We support renewable energy initiatives and empower local communities in developing countries.
Would you like to learn more about our projects or find out which financing method best suits your company? Get in touch with us, and our team will be happy to assist you.
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