The Race to 1.5°C started
More and more companies are setting net-zero targets in line with 1.5°C by the SBTi. Since the last two years, the number of participating companies has more than doubled each year. In particular, European companies are leading the way. As part of the publication of the Net Zero standard, four key elements were developed to provide companies with a framework to combat climate change:
As questions are increasingly being asked about what Beyond Value Chain Mitigation (BVCM) means according to the SBTi and how companies can actively engage in emission reduction measures outside their value chain, the SBTi is currently working on a guideline on BVCM that will be published in 2023.
In the meantime, the SBTi encourages all companies to drive forward BVCM activities as they are a key part of achieving the 1.5°C target globally.
What is BVCM?
“Beyond value chain mitigation” refers to mitigation action or investments that fall outside of a company’s value chain. This includes activities that avoid or reduce greenhouse gas emissions, and those that remove and store greenhouse gases from the atmosphere. Hence, to highlight this aspect – BVCM is not only carbon removals, which is often a misinterpretation.
Examples of BVCM include, but are not limited to:
- Forestry, e.g., Jurisdictional REDD+
- Conservation projects, e.g., peatland or mangrove
- Energy efficiency, e.g., cookstove projects
- Methane destruction, e.g., landfill gas projects
- Renewable energy, e.g., solar/wind/biogas
- Industrial gases, e.g., N2O destruction at nitric acid facilities
- Scale-up of CDR (carbon dioxide removal) technologies, e.g., Direct Air Capture (DAC) and Storage
Why is BVCM necessary?
Despite the increasing number of companies setting emissions reduction targets in agreement with the 1.5°C pathway, a large proportion of global emissions remain untouched. For this reason, it is essential to promote far-reaching reduction measures that take place outside the value chain of each company in order to meet the goals of the Paris Agreement. According to the Intergovernmental Panel on Climate Change (IPCC), there is now a 50 percent chance that global warming will exceed 1.5°C over the next two decades, if we do not significantly decrease our emissions in the next few years. This is a reason why the SBTi highly recommends to engage in BVCM as well.
Mitigation Hierarchy by the SBTi
To help companies prioritize actions, the SBTi has developed a “Mitigation Hierarchy.” According to this concept, companies should set both near and long-term SBTs on their value chain emissions and implement strategies to achieve these targets as a first order priority and focus on reducing and avoiding emissions. As the second step, companies are expected to implement BVCM activities, especially those that generate additional co-benefits for people and nature. According to the SBTi BVCM efforts should start immediately alongside the near- and long-term targets, while neutralization should increase as the company gets closer to its net zero targets.
What to do now?
If companies are unsure of how best to proceed, here is a brief summary.
1) Prioritize your Near-Term Target. Develop a plan to reduce and eliminate emissions. Every ton of CO2e you can reduce now is a win for the future.
2) Check which BVCM strategies work best for you. The SBTi recommends focusing primarily on securing and enhancing carbon sinks (terrestrial, coastal, and marine, etc.) to avoid the emissions that arise from their degradation. Furthermore, there is a need for companies to invest in nascent GHG removal technologies (e.g., direct air capture (DAC) and storage; see list in section “what is BVCM?”) so that the technology is available to neutralize residual emissions at the long-term SBT date.
3) Neutralize residual emissions to achieve Net-Zero. To get from the Long-Term target to Net-Zero, the few remaining emissions that cannot be reduced must be captured from the atmosphere using removals. Ideally, the removal technologies will already be sufficiently researched and made marketable due to the BVCM activities by the latest of 2050.
As the SBTi is still working on the policy on BVCM, the organization has launched a blog series on BVCM to give companies some initial guidance on that topic.
For more information on Net-Zero, Science-Based targets or climate strategy take a look at the DFGE solution. If you have further questions, please contact us via or by phone at +49 8192-99733-20.