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Anthesis has responded to the Science Based Targets initiative’s (SBTi) public consultation to support the development of corporate guidance on beyond value chain mitigation (BVCM) – guidance which will accelerate and scale private sector mitigation investment.
Anthesis supports all constructive input to increase the trust, rigor, and usability of the voluntary carbon market (VCM) as one key solution in climate action, as we recognise the shortfall in critical investment to achieve the climate transition.
The SBTi enables businesses to set ambitious climate mitigation targets in line with the latest climate science. It defines and promotes best practice in science-based climate target setting, provides resources and guidance to reduce barriers to adoption, and independently assesses and approves company targets. The SBTi seeks to drive a voluntary ‘race to the top’, led by pioneering companies, to empower peers, engage suppliers, influence consumer behaviour, and sway governments to take bolder action.
In October 2021, the SBTi launched the Corporate Net-Zero Standard, which provides guidance, criteria, and recommendations for companies to voluntarily set long-term climate targets consistent with scenarios to limit global temperature rise to 1.5°C above pre-industrial levels. The Corporate Net-Zero Standard incorporates four key elements:
- Near-term science-based targets (SBTs): Companies are required to set 5 – 10 year targets to reduce emissions in line with a 1.5°C pathway.
- Long-term SBTs: Companies are required to commit to emission reduction targets within their value chain to a set residual level in line with a 1.5°C pathway and no later than 2050.
- Beyond value chain mitigation (BVCM): Companies are encouraged to take immediate and consistent action to mitigate emissions beyond their value chains to limit global temperature rise to 1.5°C.
- Neutralisation of any residual emissions at the net-zero target date: Companies are required to neutralise the climate impact of residual emissions at an agreed target year (and beyond) through the permanent removal and storage of emissions from the atmosphere.
Estimates suggest that annual climate impact investment will need to increase by at least seven times by 2030, reaching a minimum of $4.3 trillion per year, compared with the current figure of approximately $665 billion (Climate Policy Initiative, 2022). Therefore, we support the SBTi’s view that companies should go above and beyond their science-based targets and value chains by supporting essential climate impact investment and global mitigation.
Many organisations are decarbonising their own operations and value chains to achieve science-based targets – but a significant number are still yet to take action as global emissions continue to rise. As a result, much more needs to be done to address the widening gap between real mitigation and climate impact investment.
Anthesis’ full response
- We support best practice around carbon markets investment, while communicating any action transparently and always prioritising reduction as the most important action.
- Each of the methods proposed by the SBTi BVCM have their own benefits and hazards; therefore, deciding an approach requires expert guidance to avoid reputational risk and generate the most significant climate mitigation potential.
- Anthesis believe a “tonne-for-tonne” methodology has the potential to provide the greatest outcomes for the climate and demonstrates corporate climate leadership if used in alignment with ICROA and ICVCM standards.
- We recognise the current scrutiny on this methodology, especially during the first half of 2023; it is therefore imperative any issues regarding methodologies used to measure additionality, permanence, leakage and local community benefits are identified, monitored and improved utilising the latest technology and guidance.
- Irrespective of the methodology used for BVCM (climate impact) investment, we stand firmly on the side of robust rules for quality attributes such as additionality, permanence and avoidance of double claiming and ‘leakage’.
- In this consultation, the SBTi put forward a distinction between “contribution” and “compensation” claims for BVCM, which Anthesis supports as it provides the language for companies to more effectively communicate the intention behind any BVCM outcomes.
- Assuming the SBTi align with the GHG Protocol, we foresee no concerns around double claiming of BVCM activities with another company’s scope 1, 2 and 3 GHG emissions.
- We welcome SBTi providing guidance on the role of claims as part of a Net Zero transition and suggest that SBTi directs its member organisations to existing claims codes and standards to create a more collective alignment on claims across sectors and geographies.
- Companies should take every opportunity to communicate information regarding BVCM transparently, and we call on the SBTi and CDP to facilitate a structured reporting framework to ensure communication is consistent throughout the market.
- BVCM-related claims are a challenging topic for companies at present, as some navigate more potent enforcement of regulations on claims, as well as concerns about the legitimacy of the carbon removed or avoided as a result of their investment or participation in the VCM. It is critical that companies do not hold back on financing the climate mitigations projects which are needed to achieve global climate goals, for the sake of discussion around the validity of claims.
- Anthesis support regulation in the space of BVCM-related claims as we believe it should provide protection and clear guidelines for organisations investing in BVCM activities in the right way.
- We also support the recent and continued development of BVCM standards, such as the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles and the Voluntary Carbon Market Initiative’s (VCMI) Claims Code of Practice; we continue to stay close to these standards and will align as more clarity becomes available.
In summary, we believe that the SBTi’s role at the centre of corporate climate commitments provides a powerful platform from which to advocate for climate impact investment to achieve global net zero; in addition to corporate decarbonisation in line with a 1.5 °C pathway.
Companies must simultaneously decarbonise their value chains in alignment with their science-based targets (both near- and long- term) and invest in solutions beyond their value chains. In producing guidance on the topic and reinforcing the message that Beyond Value Chain Mitigation is a critical element to corporate climate leadership, our hope is that SBTi’s BVCM guidance quickly closes the gap on needed investment and achieving the mitigation goals outlined by the Paris Agreement.