How is the Value Change Initiative contributing to a Net Zero value chain?

How is the Value Change Initiative contributing to a Net Zero value chain?

Written by

Dino De Francesco

Companies need to reach Net Zero by 2050 to remain on a 1.5°C pathway and help alleviate the worst impacts of climate change. Scope 3 emissions are a material part of reaching these targets because depending on the industry, they represent up to 75-90% of a company’s overall greenhouse gas emissions.

If we are to make Net Zero a reality by 2050, we need organisations committed to delivering positive environmental and social impact up and down their value chains. How is the Value Change Initiative (VCI) helping to make this happen? Read on to hear from climate and policy experts from Greenhouse Gas Protocol (GHG Protocol), Science Based Targets initiative (SBTi), and SustainCERT, co-founder of the VCI.

Creating practical guidance on accounting and reporting Scope 3 emission reductions

While incoming regulation in many jurisdictions is pushing companies to disclose Scope 3 emissions, accurate accounting and reporting still remains a challenge for companies. “Scope 3 is inherently shared and outside the direct influence of reporting companies, creating challenges in understanding and quantifying Scope 3 emissions,” says Ben Bartley, Value Change Business Development Senior Manager at SustainCERT.

Pankaj Bhatia, Director of GHG Protocol, admits much of the complexity of reporting relates to Scope 3, since it includes 15 different categories and involves both upstream and downstream actors along a company’s value chain. To enable companies to set – and meet – ambitious Scope 3 targets, clarity on how to account and report GHG emission reductions and removals is needed. According to Pankaj Bhatia, the VCI shows tremendous leadership in enabling the transition to a Net Zero value chain and advancing credible reporting. “There are still many open questions in Scope 3 accounting and reporting. Companies have meaningful action to take, but to establish integrity, 3rd party support and review is needed.”

VCI members contribute to consensus-driven guidance, creation of concepts, and practical solutions on how to make things work – for themselves, their suppliers, and peers in their sector. The work is based on real-life input from member organisations and the created guidance is aimed at implementation level.

Testing solutions for a Net Zero value chain on the ground

"As a multi-stakeholder forum, the VCI brings together lots of minds, practitioners and leaders in the Scope 3 space to collectively figure out and test what will work when it comes to accounting and reporting on value chain emission reductions," Ben Bartley explains.

The VCI moves beyond theory on Scope 3 challenges, deep diving into technical questions and testing solutions on the ground. Luiz Amaral, CEO of SBTi, says that once companies have set their targets and plans, the next step is to act on it. “We need initiatives like VCI to test out those use cases and implement pilots.”

Francesca Palamidessi, VCI Senior Manager, says the VCI brings stakeholders together to co-create solutions, and enables organisations to tackle challenges in Scope 3 implementation. “The VCI’s mission is important because the Scope 3 issue is very complex, and organisations are really struggling with understanding how to implement Science-Based Targets and achieve ambitious climate goals on a practical level.”

“We are the only one bringing together all these stakeholders at the same table to talk about the hard questions and the barriers that organisations are facing when it comes to Scope 3.” – Francesca Palamidessi, VCI Senior Manager

Working in alignment with Scope 3 guidance and enabling collaboration

The VCI is entirely focused on Scope 3 emissions, increasing its potential impact. “Our members are companies who want to tackle Scope 3 and know the challenges firsthand,” Francesca Palamidessi notes. VCI’s work is aligned with standards such as the SBTi and GHG Protocol, and supplements them by offering guidance at the implementation level. The result is a clear and consistent approach to Scope 3 emission reductions and removals – enabling companies to credibly account according to the GHG Protocol, and report impact up and down their value chains and towards Science-Based Targets.

The key facet of VCI’s work has always been collaboration between actors – after all, no organisation can tackle Scope 3 emissions alone. The VCI co-creates systems for co-claiming and co-investment with member organisations, allowing them to share the costs and risks of investment while mutually benefiting from climate claims. This helps companies take action across the value chain in ways that have been challenging before, leading to urgently needed emission reductions and removals. “This is the promise of the VCI – you’re in this together with your peers,” Ben Bartley points out.

Find out more about the work of the Value Change Initiative