Science Based Target Initiative Public Consultation on Beyond Value Chain Mitigation (BVCM)

The Science-based Targets Initiative has developed the leading framework for corporate net zero targets. This latest consultation aims to aid their development of guidance for what companies should do beyond emissions mitigation, to contribute to global-scale net zero.  Sylvera strongly supports investment in Beyond Value Chain Mitigation (BVCM) and see opportunities to use existing mechanisms such as carbon markets to deliver the highest impact.

TOPIC 1: DEFINING BVCM

Q. In defining BVCM, do you think that the SBTi should: 

1. Maintain the definition on BVCM as set out in the Corporate Net-Zero Standard: “Mitigation action or investments that fall outside a company’s value chain, including activities that avoid or reduce GHG emissions, or remove and store GHGs from the atmosphere”?
2. Amend the definition that was set out in the Corporate Net-Zero Standard to reflect that mitigation actions or investments may not have guaranteed outcomes: “Mitigation action or investments that fall outside a company’s value chain, including activities that seek to avoid or reduce GHG emissions, or remove and store GHGs from the atmosphere”? 
3. No comment. 
4. Other, please specify. 

Q. In your opinion, BVCM should include: 

1. Quantifiable mitigation only.
2. Both quantifiable and unquantifiable mitigation. 
3. No comment. 

Q. In your opinion, how important on a scale of 0–100 is it that companies investing in BVCM ensure that mitigation outcomes are additional, i.e., the mitigation would not have occurred in the absence of BVCM activities and investments? (0 being not important and 100 being very important) ‍

100

Q. Linked to the question above, which of the statements below do you support? If neither, please tick other and specify your position:

1. Companies should only be able to count actions and investments towards their BVCM commitments if they are subject to the same additionality tests as carbon credits. 
2. The SBTi should incentivize investment into mitigation which might not meet strict additionality requirements but which is currently underfinanced. 
3. No comment. 
4. Other, please specify. Companies should only be able to count actions and investments towards their BVCM commitments if they are subject to the same additionality tests as carbon credits where possible, or where not possible, to new additionality tests of a similar level of stringency (or higher) than is the case for carbon credits. This additionality requirement should also be dynamic, increasing over time as new sources of data and measurement allow for greater accuracy and confidence in the determination of additionality claims. 

Q. While the SBTi intends to align with the GHG Protocol, we are interested in perspectives on double claiming between companies investing in BVCM and the corporate scope 1–3 GHG inventories of other companies. In your opinion, how important on a scale of 0–100 is it that companies investing in BVCM avoid double claiming with other companies' scope 1, 2 and 3 GHG inventories? (0 being not important and 100 being very important)

0

Q. Linked to the question above, the SBTi is seeking feedback on perspectives on double claiming in a situation where one company (Company A) makes an investment to deliver a BVCM outcome which occurs in the scope 1, 2 and 3 value chain inventory of another company (Company B). In this situation, which of the below options do you most agree with? 

1. Only one of the companies should be able to claim the mitigation outcome and they should agree which company can claim it (either Company A for BVCM or Company B for its science-based target). 
2. Only Company A should be able to claim the mitigation outcome as BVCM and Company B must not count the mitigation outcome towards the delivery of its science-based target. 
3.  If Company A makes a climate “contribution” claim regarding its BVCM investments, as opposed to what is often referred to as a climate “compensation claim”, then both companies should be able to claim the mitigation outcome (Company A for BVCM and Company B for its science-based target). However, if Company A makes a compensation claim in relation to its BVCM investments, then Company B must not count the mitigation outcome towards the delivery of its science-based target.
4.  Both companies should be able to claim the mitigation outcome regardless of the claim that Company A intends to make about its BVCM activities and investments (Company A can claim the mitigation outcome to fulfil its commitment to BVCM and Company B can claim the mitigation outcome towards the delivery of its own science-based target). 
5. No comment. 
6. Other, please specify 

Q. In your opinion, how important on a scale of 0–100 is it that companies investing in BVCM ensure permanence of mitigation outcomes? (0 being not important and 100 being very important)

‍70

Q. Linked to the question above, which of the statements below do you support? If neither, please tick other and specify your position: 

1. Companies should only be able to count actions and investments towards their BVCM commitments if they have mitigation measures in place to manage the risk of reversals including monitoring of the continued storage of carbon. 
2. The SBTi should incentivize investment into mitigation with short-lived storage and therefore, given monitoring of permanence represents a barrier for companies, the SBTi should set a lower bar for ensuring permanence of mitigation for BVCM (since it is above and beyond a company’s science-based target).
3.  No comment.
4. Other, please specify. The SBTi should set a high bar for the level of confidence in likely permanence (ex ante) and seek to ensure a proportionate approach to ongoing permanence monitoring, but (at least to 2030, or 2035) allow the use of carbon credits with expected permanence below 100 years (e.g. 40 years).

Q. Is the distinction between BVCM and neutralization of residual emissions described in this document clear? (yes/no) 

TOPIC 2 - OVERARCHING PROCESS FOR BVCM

Q. Our objective in including this visualization is to provide a clear process to guide companies implementing and investing in BVCM. Do you feel that this process is helpful for the reader? 

1. Very helpful 
2. Somewhat helpful 
3. Not so helpful 
4. Not at all helpful 

TOPIC 3: DETERMINING THE NATURE AND SCALE OF THE COMMITMENT TO BVCM

Q. In your opinion, application of which method(s) would result in the greatest outcomes for climate? 

1. Ton-for-ton
2. Money-for-ton 
3. Money-for-money 
4. No comment
5. Other, please specify: Each of the proposed methods could potentially result in a meaningful outcome. Ton-for-ton will result in the highest level of measurable outcomes for the climate and is the clearest way of linking BVCM to the challenge of mitigating unabated corporate emissions on the road to net zero, and in most cases this is what we would recommend. However in some cases a hybrid approach could result in greater aggregate impact. A hybrid approach could consider money-for-money or money-for-ton, whichever is highest, with the proceeds used to fund ton-for-ton compensation and the remainder used to fund harder to quantify mitigation activity, adaptation and loss and damage. This allows companies to use a blended portfolio combining both quantitative and qualitative impact by ensuring a significant volume of emissions is being mitigated while also enabling companies to e.g., support more expensive activities that need funding to scale, or adaptation. For sectors such as the tech sector where a ton-for-ton approach represents a more easily achievable BVCM target compared to their ability to pay, this approach could make sense. 

Q. In your opinion, application of which method(s) best reflect corporate climate leadership? 

1. Ton-for-ton 
2. Money-for-ton 
3. Money-for-money 
4. No comment 
5.  Other, please specify Money-for-money, or money-for-tonne, whichever is highest, with the proceeds used to fund full historical ton-for-ton compensation and any remainder used to fund harder to quantify mitigation activity, adaptation and loss and damage

Q. In your opinion, which method(s) would be the most attractive to companies?

1. Ton-for-ton 
2. Money-for-ton 
3. Money-for-money 
4. No comment 
5.  Other, please specify While we cannot speak for other companies, from our perspective money-for-ton would be most attractive as it would create the most aligned incentives (effectively acting like a carbon tax). We also think that the VCMI’s approach of giving variable credit for variable levels of action could be more attractive to companies.

Q. In your opinion, application of which method(s) best shield companies from criticism and greenwashing? 

1. Ton-for-ton 
2. Money-for-ton 
3. Money-for-money 
4. No comment 
5.  Other, please specify The question has no answer, given that charges of greenwashing relate entirely to the claim made, not the method used to allocate resources to BVCM

Q. In your opinion, what is best practice application of each of the methods described?

‍All three options advocate compensating for 100% of emissions, which is a reasonable benchmark, however the VCMI’s approach of giving variable credit for variable levels of action could be more attractive to companies.

Q. For the ton-for-ton method, in your opinion, how important is it to ensure permanence of mitigation outcomes on a scale of 0–100 (0 being not important and 100 being very important)?

‍70

Q. For the money-for-ton method, in your opinion, how important is it to ensure permanence of mitigation outcomes on a scale of 0–100 (0 being not important and 100 being very important)? 

‍70

Q. For the money-for-money method, in your opinion, how important is it to ensure permanence of mitigation outcomes on a scale of 0–100 (0 being not important and 100 being very important)? 

‍70

Q. For the ton-for-ton method, in your opinion, how important is it to ensure additionality of mitigation outcomes on a scale of 0–100 (0 being not important and 100 being very important)?

‍100

Q. For the money-for-ton method, in your opinion, how important is it to ensure additionality of mitigation outcomes on a scale of 0–100 (0 being not important and 100 being very important)?

‍100

Q. For the money-for-money method, in your opinion, how important is it to ensure additionality of mitigation outcomes on a scale of 0–100 (0 being not important and 100 being very important)?

‍100

Q. For the ton-for-ton method, in your opinion, how important is it to avoidance of double claiming between one company's BVCM activities and other companies' scope 1, 2 and 3 GHG inventories on a scale of 0–100 (0 being not important and 100 being very important)? 

Q. For the money-for-ton method, in your opinion, how important is it to avoidance of double claiming between one company's BVCM activities and other companies' scope 1, 2 and 3 GHG inventories on a scale of 0–100 (0 being not important and 100 being very important)? 

Q. For the money-for-money method, in your opinion, how important is it to avoidance of double claiming between one company's BVCM activities and other companies' scope 1, 2 and 3 GHG inventories on a scale of 0–100 (0 being not important and 100 being very important)? 

Q. For the ton-for-ton method, in your opinion, how important is it to ensure avoidance of double claiming between companies and countries on a scale of 0–100 (0 being not important and 100 being very important)?

‍0

Q. For the money-for-ton method, in your opinion, how important is it to ensure avoidance of double claiming between companies and countries on a scale of 0–100 (0 being not important and 100 being very important)?‍

0

Q. For the money-for-money method, in your opinion, how important is it to ensure avoidance of double claiming between companies and countries on a scale of 0–100 (0 being not important and 100 being very important)?

‍0

TOPIC 4: DEPLOYING RESOURCES AND FINANCE ACROSS BVCM ACTIVITIES

Q. In your opinion, to what extent will the combination of the: (i) six principles for BVCM portfolio design, the (ii) guiding questions, (iii) illustrative examples of aligned mitigation actions, (iv) cross-cutting minimum standards and social safeguards, and (v) case studies in consultation topic 9 be helpful for companies in deciding where to channel their BVCM resources and investments? 

1.  Very helpful 
2. Somewhat helpful 
3. Not so helpful 
4. Not at all helpful 

Q. In your opinion, should the SBTi provide more guidance on the operationalization of the principles for BVCM portfolio design? (yes/no/no comment) 

It would be useful for the guidance to identify existing mechanisms which already meet a lot of these principles e.g. carbon credits.

Q. Please provide recommendations if you have them on how companies might operationalize the principles? (open text)

The most accessible existing mechanism that offers the opportunity for companies to operationalise these principles is the voluntary carbon market, where high quality credits are used. Companies should be signposted to these existing options to increase accessibility for non-experts or newcomers.

TOPIC 5: BVCM-RELATED CLAIMS

Q. Given that claims are often under the jurisdiction of governments, on a scale of 0–100, how directive do you think the SBTi should be when providing guidance on BVCM claims (a score of 0 would be providing a discussion of the role of claims, a score of 100 would be defining claims)? If you are at a company, it might be useful to consider this question with your legal and marketing teams. 

Q. Are there other federal, national and/or supra-national government-led efforts on claims that should be highlighted in the document? (open text) 

The VCMI Claims Code of Practice  provides a framework for a tonne-for-tonne approach to BVCM. Rather than replicating work the SBTi should explicitly coordinate with the VCMi to ensure the BVCM guidance and CCoP are compatible and complementary.

Q. Are there important trends in claims that you feel have been missed in the discussion of claims in this document? Please provide a description and references. (open text) 

It is important to recognise that BVCM will be a significant investment for companies in some industries. Claims are often key to this, but can easily slip into greenwashing without clear guidance and boundaries. There are existing initiatives that are addressing the issue of high integrity claims, so the SBTi does not need to replicate this work. However, they should clearly identify which claims guidance is compatible with BVCM and signpost companies to that.

Q. Given the emerging regulatory context and the fact that the SBTi will not be validating BVCM claims at this time, what information would be most helpful to companies within this guidance? (open text)

The SBTi should signpost clearly other frameworks which exist and outline concrete options for BVCM which companies can follow without fear of greenwashing. Hypothetical guidance and principles can introduce uncertainty which may discourage companies from engaging in BVCM, whereas clear, accessible frameworks remove much of this fear. A good example is the VCMI Claims Code of Practice.

TOPIC 6: REPORTING ON BVCM

Q. In your opinion, should any of the recommended reporting questions be edited? If so, please specify which reporting question should be edited and describe your proposal. (open text)

Question 12 could be clarified, for example to include a source that should be used to provide a social cost of carbon. The question could also just ask for the externalised cost of unabated emissions. If it directly followed question 7 then it would allow easy comparison between the two figures.

Question 7 should therefore also explicitly require the total sum to be reported.

Q. Where do you recommend companies report against these questions? (multiple tick box) 

1.  Submission to the SBTi which can then aggregate information on a public dashboard 
2. In their sustainability reports or websites 
3. In their financial report 
4. To a reporting initiative such as CDP 
5. Other, please specify: There should be one option with a standardised template that is required for all to allow easy look up/ comparison, with additional options for completeness e.g. companies could also include in sustainability or financial reporting.

TOPIC 7: INCENTIVES FOR BVCM

Q. In your opinion, what are the most significant barriers preventing BVCM investment? Please rank the barriers below in terms of their significance (with a rank of 1 being the most significant): 

1. Fear of greenwash accusation 8
2. Lack of a credible claim for communicating BVCM activities and investments 3
3. Lack of available funds 2
4. Lack of consumer demand 6
5. Lack of customer demand (relevant for business-to-business companies) 7
6. Lack of investor demand 5
7. Lack of standardized guidance on minimum standards and best practice 4
8. Perception of environmental and social risks associated with BVCM 9
9. Weak financial business case 1
10. Other 

Q. In your opinion, how might the SBTi incentivize companies to invest in BVCM? (open text) 

The SBTi could require BVCM as part of a science-based target (wherever financially viable for the company with the SBT). Getting the incentives right is vital to delivering on the key objective of the guidance – to scale up corporate investment in BVCM. SBTi is seen as an ‘arbiter’ of best practice in corporate climate policy. It has a real opportunity to drive transformative action by making a definitive statement that BVCM is both urgent and vital. The guidance should state that SBTi requires companies to set BVCM targets and deliver measurable action plans, alongside their science-based targets, i.e., BVCM must be complementary to, not instead of, the deep value chain cuts/science-based targets.

This could be operationalized with one of the following approaches:

a. SBTI utilizes an existing independent standard – e.g., companies must meet the requirements of the VCMI Claims Code of Practice (at least ‘silver’)

b. The SBTi Guidance on BVCM sets out a clear approach to determining the minimum level of BVCM activity required, based e.g., on the ton-for-ton approach and the principles outlined in sections 3 and 4 of the consultation document.

As an alternative, if it is not possible (at this stage) for SBTi to require BVCM as recommended above, it would be beneficial for SBTi to formally endorse and recognise the VCMI status of each company with an SBT, in order to explicitly recognise and celebrate companies taking additional action in this way.

TOPIC 9: ILLUSTRATIVE CASE STUDIES

Q. In your opinion, how helpful are the illustrative case studies in bringing to life how the SBTi’s recommendations on BVCM would be applied in practice? a) Very helpful b) c) Not so helpful d) Not at all helpful 

Q. If you have feedback on these illustrative case studies, please provide suggestions on how they could be improved. For example, do you recommend we provide case studies for other sectors and are there any sectors for which the guidance might differ substantially, e.g., potentially financial institutions? (open text)

The illustrative case studies could give more detail about how in money-for-ton or money-for-money approaches the opportunities for investment could be identified and impact monitored, and suggested minimum standards or best practice for third party assurance of investments and impacts.

CLOSING

Open feedback or suggestions (open text) 

We welcome SBTi’s initiative to set out BVCM guidance in order to incentivize corporate commitments to finance mitigation activities. We believe that carbon markets have a critical role to play in achieving the Paris Agreement goals and BVCM guidance can help bolster corporate confidence and appetite to gradually increase climate action.

We believe that high level guidance on BVCM may not be enough. Corporates need further validation on what are acceptable actions/investments to feel comfortable enough to act. As such, we recommend the BVCM guidance aims to link up more directly to complementary initiatives already available in the market to provide a clear path to BVCM for corporates, and to consider requiring BVCM.