Beyond Value Chain Mitigation (BVCM) has recently emerged as a ground-breaking strategy for businesses committed to addressing climate change. This article delves into the concept, drawing insights from the Science Based Targets initiative (SBTi) and its latest report on the subject.
Beyond Value Chain Mitigation (BVCM) refers to actions or investments aimed at tackling climate change that are not directly part of a company's everyday operations. These include initiatives to prevent, lessen, or capture and store greenhouse gas (GHG) emissions in the environment. Companies can contribute to BVCM by various means, such as buying and retiring reputable carbon credits or making direct financial contributions through equity investments, loans, or project financing.
BVCM involves:
It's crucial to note that BVCM actions are distinct from the company’s scope 1, 2, or 3 GHG emissions, hence not contributing directly to the company’s emission reduction targets.
BVCM initiatives can manifest in various practical forms, tailored to different industries and their unique impacts on the environment. For instance, a technology firm might invest in renewable energy projects that power communities beyond its operational footprint, effectively reducing GHG emissions outside its immediate value chain.
In another example, a manufacturing company could support reforestation efforts, contributing to carbon sequestration in areas not directly related to its product lifecycle. Similarly, a retail business could fund the development of sustainable agricultural practices among smallholder farmers, thereby indirectly reducing emissions associated with the products it sells. Each of these examples illustrates how companies can extend their environmental stewardship beyond their immediate operations and supply chains, embodying the essence of BVCM.
Carbon offsetting involves compensating for emissions by financing equivalent carbon dioxide savings elsewhere. Typical projects include reforestation or renewable energy projects. Offsetting is often used to achieve a balance after all feasible emission reductions have been pursued.
BVCM, on the other hand, encompasses a broader scope of actions beyond traditional carbon offsets. It involves initiatives that might not directly offset a company's emissions but contribute to broader climate change mitigation. BVCM includes investing in new technologies, supporting sustainable practices in communities, or engaging in projects that reduce or remove greenhouse gas emissions beyond the company's value chain.
While both strategies aim at mitigating climate change, BVCM offers a more holistic approach, encouraging companies to take responsibility for their environmental impact in a broader sense, beyond just balancing their own emissions.
The SBTi highlights BVCM's role in propelling global efforts towards achieving net-zero emissions.
The key goals of BVCM are:
The business case for Beyond Value Chain Mitigation (BVCM) is compelling, offering companies the chance to unlock new opportunities, mitigate future risks, and enhance long-term value. For instance, a company in the food and agriculture sector can bolster its supply chain resilience and contribute to sustainability by investing in landscape restoration, directly linked to its operations.
This approach not only addresses climate-related changes but also opens up new markets, drives innovation, and strengthens the company's reputation among consumers and investors. In essence, BVCM aligns a company's growth ambitions with its sustainability goals, providing a strategic advantage in today's environmentally conscious business landscape.
The SBTi outlines a structured approach for businesses to implement effective BVCM strategies.
Key steps include:
Beyond Value Chain Mitigation (BVCM) is not just a methodology; it's a transformative journey towards achieving comprehensive sustainability in the business ecosystem. By adopting BVCM, companies can transcend traditional sustainability limits, making significant contributions to both environmental conservation and societal well-being. This approach requires innovation, collaboration, and a deep understanding of the broader impacts of business operations.
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