Enabling collaboration to unlock value chain decarbonisation at scale – takeaways from the VCI event at New York Climate Week
Companies are quickly realizing reaching their Net Zero commitment cannot be done without addressing Scope 3 emissions and certainly not alone.
On the 21st of September, Scope 3 experts and practitioners joined the Value Change Initiative (VCI) flagship event at New York Climate Week to share practical insights and accelerate value chain decarbonisation. They embraced the complexity that often comes with Scope 3 and engaged in technical, sometimes challenging yet much needed discussions on how to encourage and incentivise action.
Here are the main takeaways from the event.
Perspective: key to fostering collective action and tackling Scope 3.
Scope 3 emissions are by nature a collective challenge, and a complex one. Multiple actors across the value chain are responsible for part of the process and have access to different data. Companies, civil society and accounting frameworks need to work together to truly understand and overcome the data quality, traceability, transparency and accessibility challenges associated with Scope 3 emissions. Furthermore, much of the current conversation is focused on individual claims, whereas value chains involve multiple organisations and therefore require collective action.
A roleplay organised during the Claims Lab session helped members experience different roles within Scope 3 systems. The lab showed that, on top of needing comprehensive systems and frameworks to overcome free riding and double counting challenges, better understanding other actors’ roles and perspectives can bolster alignment, trust and collective action. Ultimately, this roleplay as well as the other discussions from the Claims lab will shape an output with recommendations for organisations to co-claim, and with that to contribute to build the business case for join action in decarbonisation interventions.
There’s a need for in-depth Scope 3 implementation discussions – but companies can start taking action today.
“The climate is deaf. It doesn’t hear anything we say, it doesn’t know about our commitments, it doesn’t know about our targets, but it can do math on molecules up and molecules down. At the end of the day, everything we do needs to be in service of that”. In the opening keynote, Kevin Rabinovitch, Global VP of Sustainability and Chief Climate Officer at Mars, reminded the audience driving down emissions and moving to a space where we are focusing on performance is what matters the most. To do that, he said, companies should stop asking what they can do by 2030 and instead ask themselves “what would it take to reach our goals by 2030?”.
An important takeway from the discussions is that both practical action and technical conversations to solve for implementation challenges must happen in parallel. Scope 3 is at the heart of credible decarbonization strategies, and while safeguards to ensure impact is achieved, progress can be tracked and accurately reported on are essential, companies should start reducing their emissions today. “Start treating working on Net Zero the way you would treat any other serious strategic business initiatives” Kevin said. “Businesses take many decisions that are risky and uncertain. One of the opportunities for us as a community is to push back on the narrative that we have to have everything figured out to the third decimal place and 30 years into the future before we can get going”.
Let’s embrace the technical and complex discussions, but let’s make sure we don’t let perfection be the enemy of the good.
Market-based mechanisms can provide solid alternatives to traceability and accounting challenges.
Poor data availability and quality and limited traceability are some of the biggest challenges for Scope 3 accounting – and they are not going away anytime soon. Proactively finding alternative and acceptable solutions in collaboration with other key actors in the Scope 3 space, such as GHG Protocol and Science Based Targets initiative (SBTi) is critical.
For the Value Change Initiative, market-based mechanisms can provide the solutions we need. With appropriate safeguards, market-based mechanisms can increase transparency and provide the incentives needed to scale Scope 3 action. Pankaj Bhatia, Director of the Greenhouse, highlighted the role of a market-based approach to drive and scale investments but also stressed the importance of safeguards: “we need to understand how to strike the right balance between companies who will do the right thing and those who will try to game the system”.
Tackling Scope 3 emissions is challenging. It also provides a unique opportunity for companies to come together and co-create solutions that answer their practical needs. Watch the recording here for more insights from the event.
Learn more about our upcoming Food & Agriculture Working Group to address sector-specific challenges for Scope 3 accounting.