VCI on the use of Environmental Attribute Certificates for Scope 3

VCI on the use of Environmental Attribute Certificates for Scope 3

Written by

Dino De Francesco

In early April, the Science Based Target initiative (SBTi) Board of Trustees released a statement on the use of environmental attribute certificates (EACs) for Scope 3. Reaction was generally mixed across the industry, with some welcoming it as a way to accelerate corporate action and finance climate projects, while others feared it will delay direct emission reductions from company value chains. SBTi CEO Luiz Amaral shared a blog to reinstate SBTi’s commitment to their governance structure and to call industry stakeholders to engage on the topic.

This recent debate has raised interest from market players and highlighted the urgent need for clarity and alignment on the use of EACs as well as the best way to incentivise emission reductions from companies. We have been following recent developments and have been in close contact with our Corporate Advisory Group members.

The Value Change Initiative has been actively engaging with key players since its creation in 2017 with a focus on developing actionable Scope 3 solutions. Together with our members, we have been working on creating a credible path for the use of Scope 3 environmental attribute certificates with strong safeguards in the food & agriculture and apparel sectors, through the use of approaches such as the value chain Interventions and the Supply Shed. Our work has been defined by ensuring high environmental integrity while creating appropriate flexibility to incentivise action. We’ve made all our guidance available on our website.

By developing sector specific guidance, our goal is to create rules that foster collaboration between value chain partners and co-investment. Our long-term vision is a functional Scope 3 ecosystem where the right action is incentivised and partnerships accelerate action, and for that, we strongly believe that co-claiming mitigation impact is the key to unlock Scope 3 action at scale – with VCI being very active in developing such mechanisms.

As VCI, we are fully committed to continue working closely with our stakeholders to collect input from our Corporate Advisory Group and members as well as exploring implications for implementation. All of this is done in pursuit of the ultimate goal - credible Net Zero decarbonisation.

We will also continue our engagement with SBTi and support them as they work to clarify the appropriate use of environmental attribute certificates in Scope 3, within the mitigation hierarchy and supporting a science-based Net Zero target.