New initiative targets barriers to value chain decarbonisation, aims to unlock vast new climate finance
The Advanced and Indirect Mitigation Platform (AIM) will serve as a hub for removing barriers to ‘value chain’ mitigation and coordinating collective mitigation action in sectors that require extensive investment or technological change to reduce climate impact. To jump start this work, AIM will organise expert stakeholders to develop guidance on how companies can measure and take credit for emission reductions in their value chain – a critical missing piece in the climate landscape today. This work can unlock billions in new private sector climate funding and propel the most challenging sectors towards decarbonisation.
SCOTSDALE, ARIZONA – 16 FEBRUARY 2023
The Advanced and Indirect Mitigation Platform (The AIM Platform) will serve as a hub for removing barriers to ‘value chain’ mitigation and coordinating collective mitigation action in sectors that require extensive investment or technological change to reduce climate impact. Through its inaugural initiative, The AIM Platform will bring together experts from civil society and practitioners from the private sector to develop credible approaches for accounting, reporting and claiming the results of efforts that reduce emissions within a company’s value chain. Established by The Gold Standard, Neoteric Energy and Climate, and the Center for Climate and Energy Solutions (C2ES), it was formally launched at GreenBiz 23 in Scottsdale, Arizona on February 16, 2023. The AIM Platform will be working closely with the Science Based Targets initiative and GHG Protocol, with the goal that its outputs will inform and complement future updates to their respective guidance.
In recent years, thousands of companies have set science-based or net-zero targets in support of the Paris Agreement. Most of those targets include ambitious commitments to tackle indirect - or ‘value chain’ - emissions. As companies work toward decarbonising the suppliers and customers that make up their value chain, however, they quickly encounter significant barriers. Current GHG accounting and target-setting guidance lacks methods by which companies can credibly calculate and claim reductions from most value chain decarbonization efforts. For example:
- In the agriculture sector, it is often impossible to trace the source of goods purchased below the regional level. Companies that cannot identify their true suppliers nor practically collect data across their shifting supplier base have been nevertheless developing first-of-kind decarbonisation projects within their ‘supply shed’- a group of entities that could reasonably be their suppliers.
- Within the technology sector, data centre operators are beginning to partner with the suppliers of their suppliers in order to reduce the embodied emissions associated in the manufacturing of steel or production of copper used in data centre construction, even though they cannot track whether that particular steel or copper makes it into their data centre.
- In the aviation sector, customers have come together to create a system to certify and transparently track emission reductions from sustainable aviation fuel (SAF) they fund through partnerships with airlines, even though it’s not possible to ensure their employees fly on planes using that SAF. This advanced fuel is 2-4 times as expensive as regular jet fuel.
In all of these examples, the companies currently have no way to credibly represent the resulting emission reductions in their scope 3 GHG inventories or count them toward their scope 3 targets. This gap in guidance robs companies of the justification they need to scale these significant, necessary investments.
It is possible to unlock solutions to these challenges. By building a robust and transparent accounting, claiming and reporting framework that enables companies to take credit for indirect emissions reductions achieved in the sectors or activities associated with their supply chain, the AIM Platform will pave the way for vastly increased contributions to critical climate solutions.
Over a dozen experts have accepted invitations to sit on the Governing Committee for AIM’s value chain guidance development initiative, and today the organisers are issuing an open call to experts from civil society, standard-setting bodies and the private sector to apply to participate in sectoral and cross-cutting working groups. Details can be found on the partnership’s website: www.aimplatform.org. For those interested in finding out more, a webinar will be held on Thursday March 9th at 11am-12pm EST.
“By convincing companies to estimate their emissions and set ambitious climate commitments, the work of SBTi and the GHG Protocol has been, and will continue to be, critical to progress in corporate sustainability strategies. Our aim is to work with them and build on that success by providing companies the tools they need to achieve those commitments and unlock a new wave of private sector finance”, said Margaret Kim, CEO of Gold Standard.
“AIM has the potential to be a game-changer in how companies finance large-scale emissions reductions in their value chains. The guidance we are developing will benefit companies across the economy, but especially those in sectors where abatement requires significant, concentrated capital investment in low-carbon technologies. By building a robust and transparent accounting, claiming and reporting framework, AIM will give companies a powerful new tool to finance interventions that reduce emissions anywhere in their value chain – unlocking private capital to accelerate and scale corporate investment in climate solutions”, said Nat Keohane, President, Center for Climate and Energy Solutions.
“The mission of the AIM Platform isn’t to give companies a practical way to achieve their climate targets – though it will. The mission is to direct their funding so it underpins the transition of the highest emitting sectors of the global economy”, said Kim Carnahan, CEO, Neoteric Energy and Climate.