Amidst a climate of uncertainty caused by drastic changes in the environment, the actions we now take can dictate the state of the planet, setting us down a path of either degradation or development. Building a net-zero and sustainable economy requires great effort. As we move closer to our 2030 targets, there is more urgency in ensuring global temperatures do not continue to rise and that across the world, lives and ecosystems are empowered and improved.
While the private sector continues equipping themselves with strategies and resources that can embed sustainability into their own operations and value chain, there lies more opportunity to drive sustainable development across all levels, exceeding expectations through adding value beyond the business. Regions and communities that are impacted the most by climate change may not have enough means to uplift themselves out of current situations. Sustainability is a team effort and by driving collective action and resources to critical areas, communities worldwide would be able to kickstart and strengthen their own means of driving sustainable progress.
Beyond Value Chain Mitigation (BVCM) refers to activities or investments outside a company’s value chain that mitigate the adverse effects of climate change. Spearheaded by the Science-Based Targets Initiative (SBTI), BVCM aims to create more ambitious and accelerated progress towards net-zero targets.
This raises the question on why a business should invest time and resources on sustainability initiatives that are not involved with its own value chain. BVCM, however, is an extended are of action for a business, another arm that can drive success. As consumers and investors build more awareness and support towards sustainable enterprises, businesses can take advantage of this increasing demand for sustainable businesses by committing to BVCM and supporting or developing initiatives that can accelerate the progress towards sustainability. In return, this dedication to sustainability can improve brand reputation, leading to more robust businesses amidst an uncertain and changing environment.
By incorporating BVCM into operations, a business also opens themselves up to increasing sustainability and ESG talent that can further support their business beyond and within the value chain. This can also enhance job security and social development as businesses continue to strengthen their endeavors in sustainability, adding value and positive impact to an individual.
Through BVCM, a business builds resiliency. Sustainability factors are intertwined and interconnected with each other. Changes in climate can indirectly and directly affect operations. Ecosystems that do not receive proper funding for protection and conservation may have adverse impacts on global supply chains. These negative impacts on the environment can also disrupt society as a whole. There is a long way to go in reaching sustainability targets when funds do not reach underfinanced areas and communities. When a business extends their support beyond their value chain, they are able to advance closer to global sustainable development, future-proofing communities, ecosystems, and their business in the long run.
The private sector and large companies and institutions have great capabilities to lead us all towards a sustainable future. Yet focusing and directing all efforts towards within-the-value-chain initiatives neglects growing sustainability-related concerns and troubles experienced by communities. Just because these communities do not directly affect the business doesn’t mean that they are undeserving of support and financing tied to sustainability. As mentioned before, sustainability factors are interconnected and negative impacts can trickle down eventually to businesses. BVCM encourages the private sector to achieve targets not just set by themselves for their business, but also achieve worldwide sustainable development goals.
When committing to a science-based target under the SBTi, one of the additional steps in the process is to develop a BVCM pledge and the initiatives the business plans to undertake, including the scale and its time period. BVCM activities and the company’s performance are also to be reported. Yet before taking the pledge, what are some activities companies can undertake to drive sustainability beyond the value chain?
Under the mitigation hierarchy, a business should avoid creating further emissions and reduce their current emissions. Yet beyond these two activities, once a company has developed initiatives to remove and reduce their emissions, they should eventually seek carbon credits to further offset emissions they cannot control and avoid. BVCM activities can include purchasing high-quality carbon credits or investing in mitigation activities. These activities can consist of funding climate technology and energy efficient devices, scaling the permanent removal of greenhouse gasses, and the protection and conservation of ecosystems and forests.
The SBTi also suggests that in addition to participating in carbon markets, a company can set up their own carbon tax program and channel these funds to climate projects. They can also allocate a portion of their revenue or profit to support climate projects, contributing to global net-zero.
Before embracing BVCM, here are some tips and practices you can apply to ease its integration to your company.
The greatest impact a business can make towards society and the environment is by starting from within. Addressing the most pressing concerns and the impact a business makes towards its stakeholders and affected ecosystems and communities can maximize efforts towards global sustainability. A business can’t just head immediately to BVCM. It needs to prioritize sustainability and ESG factors, issues, risks, and opportunities it can control and mitigate, given their current resources, knowledge, and capacity. Once the business has already mapped out and implemented a strategy dedicated to developing a sustainable value chain, they can now proceed to assess issues that fall beyond the value chain.
Determining BVCM activities can be confusing due to its newness and the different activities that can fall under it. To ease decision making, a business can embrace BVCM by integrating it into their own sustainability goals and ambitions, making the commitment to the initiative. They can also look at the different Sustainable Development Goals and align their initiatives with targets that are currently off track. Outside your own value chain, what advocacies does the business have? While BVCM still shows little direct financial returns to a company, by aligning initiatives with advocacies, a business can still find meaning and fulfillment in these activities.
Achieving sustainable growth worldwide also includes uplifting communities that require the most aid. The impacts of climate change are experienced the most by low-income communities and environments that require critical aid. When developing or supporting climate projects, a company can focus on supporting projects targeted to achieving net-zero while improving the quality of life of underserved communities.
There is value beyond the value chain. To accelerate progress towards net-zero, companies can take the lead through strategic and effective beyond the value chain activities. From scaling removals to conserving ecosystems, each effort beyond the value chain can uplift communities and contribute to global sustainability. By committing to BVCM, a business can build resiliency not only for themselves but for communities worldwide.
At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.
