Beyond Value-Chain Climate Action
The past decade has seen a significant evolution in voluntary corporate climate action. While it has always been clear that reducing greenhouse gas (GHG) emissions is the most important climate action a business can take, there has grown a movement to parse out the best practices for where and how these reductions occur. Today, it is now widely recognized that any sustainability-minded company should first start by taking steps to substantially reduce emissions in their operations and value chain.
Value Chains: Within and Beyond
A value chain is a concept used to describe the full range of activities performed by a company to create a product. Value chains are generally understood to stretch all the way from product design and procurement of raw materials to end use and disposal by customers.
In-value-chain emission reductions are essential, but they present two significant challenges: they can be expensive to implement, and they alone cannot reduce most companies’ emissions to true zero. This is where carbon credits and the concept of beyond-value-chain climate action become so valuable.
Voluntary carbon markets have created a funding mechanism for climate-positive activities that wouldn’t have happened without said funding. The climate impact of these activities is measured in carbon credits, which represent one metric ton of GHG emissions either reduced or removed from the atmosphere. Many carbon crediting projects, like improved forest management, avoided conversion of grasslands, and reforestation, take place outside of most companies’ value chains and yet are proven to be effective GHG abatement methods with relatively low marginal costs. Carbon credits provide a measurable, third-party-verified way for businesses to take immediate climate action outside of their value chains while working on longer-term emission reductions within their value chains, as underscored by ACR in its open letter to future carbon credit buyers (1).
Responsible Use
Voluntary carbon markets offer companies the option to be more flexible, as well as more ambitious with their sustainability strategies. And with more and more businesses entering carbon markets each year, there is a growing consensus around best practices for how to responsibly use carbon credits.
As detailed by Carbon Market Watch in its recent joint letter, beyond-value-chain climate action is not just a buzzword, but rather a series of discrete strategic actions (2). It always begins with making a strong plan for reducing emissions within one’s own value chain. Then, with internal decarbonization prioritized, businesses can determine a budget and decide what climate actions they want to support outside of their value chain. The next step is to purchase and retire high-quality carbon credits, and lastly to clearly distinguish between internal decarbonization and beyond-value-chain funding when communicating these efforts.
Beyond Frameworks and Guidelines
While corporate sustainability advisory organizations like Science Based Targets Initiative and Integrity Council for the Voluntary Carbon Market continue to refine their frameworks, the principles for responsible voluntary climate action are straightforward. Companies don’t need to wait for perfect guidance—they can take steps today to finance impactful beyond-value-chain climate initiatives as part of a broader sustainability strategy.
At The Climate Trust, we believe GHG emission reductions and good land stewardship go hand in hand. Our projects span across the United States, in partnership with landowners in places like Colorado, Florida, Montana, New Hampshire, Ohio, Oregon, Washington, and Wisconsin.
Are you considering taking climate action beyond your value chain? If so, then please get in touch to learn how The Climate Trust can help you make a meaningful difference.
References: