Collective action is needed to address Scope 3 emissions. Companies across the value chain need to be able to share the benefits as well as the costs of interventions to reduce emissions. For this to be possible, the mitigation outcomes can be unitized, enabling transfer across actors in the value chain and allowing each company to co-claim and report the emission reductions they have contributed to. SustainCERT proposes an innovative system based on Impact Units, which represent emission reductions or removals in the value chain. Impact Units are linked to the amount of goods sourced as well as an actor’s position in the value chain, ensuring credible transfers between actors.
In addition, verifying emission reductions or removals increases the credibility and level of trust in mitigation outcomes. This is needed to unlock opportunities for the transfer of value and assets between companies, as well as for meeting stakeholder expectations and regulatory compliance.
This paper presents the Dual Factor Credibility Framework developed by SustainCERT to overcome challenges to Scope 3 accounting and reporting. The framework allows companies to 1) verify mitigation outcomes and 2) unitize, transfer, credibly claim and report emission reductions in a Scope 3 inventory. Put together, this can help companies decarbonize their value chain, meet Scope 3 targets, and collaborate with partners in the value chain to share costs.
The 1st Factor of the framework entails an audit on the greenhouse gas (GHG) quantification approach, the provided project data, and the ownership of the mitigation outcomes, while the 2nd Factor covers the attribution to a value chain, the assessment of claim and right to report as well as the integration and calculation of impacts in an inventory.
