Simplifying Scope 3 engagement with the Climate Value Chain Framework
This report comprises general statements of factual information and not financial advice. Read our Important Notice
Conversation on Scope 3 has stalled
Since 2021, Accela Research has been assessing the credibility and effectiveness of corporate transition plans. After closely tracking the performance of oil and gas majors for over three years, we've observed minimal progress in transforming their businesses or reducing emissions beyond divestments. Investors engaging with these companies have reported that scope 3 discussions have largely stalled.
In response, Accela has developed a framework to facilitate constructive dialogues with companies, helping to identify opportunities for emission reductions and where additional incentives or strategic levers are needed.
A framework to facilitate evidence-based dialogues on decarbonising value chain emissions
Evidence-based dialogues needed
Only 15% of companies with net zero commitment have set scope 3 emissions targets. The complexity of corporate value chains, combined with the varying degrees of influence companies have over their partners, makes it challenging to create business strategies for reducing scope 3 emissions.
To move forward, it is essential to foster evidence-based dialogues between corporations and their stakeholders. These discussions should focus on what companies can realistically achieve today and identify interventions that would increase the level of ambition for decreasing the emissions in their value chain.
Applying the Climate Value Chain Framework
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Accela’s Climate Value Chain Framework supports investors in data-driven engagements with companies to further align scope 3 decline with a 1.5C trajectory.
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The Climate Value Chain Framework aims to:
01 Expose minimum ambition
Establish minimum targets for Scope 3 decarbonisation based on existing policy settings for grid decarbonisation and efficiency improvements.
02 Explore maximum Ambition
Use the economics to identify available decarbonisation opportunities, and then identify additional actions—such as lobbying or R&D—to realize those opportunities.
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We have tested the Climate Value Chain Framework with two companies—one in mining and the other in oil and gas. Our findings indicate that an iron ore and bauxite mining company could achieve a minimum Scope 3 decline in material categories of approximately 11%, while an oil and gas company with a production cap could expect a decline of around 4% by 2030.
For both, there are significant economic decarbonisation opportunities within the value chain that can drive meaningful reductions in scope 3 emissions. However, realizing these opportunities will depend on customer-specific factors, which can be identified through engagement, as well as external factors such as policy incentives.
