The carbon standards body has opened a scheme that lets firms measure, check and certify the emissions cuts they pay for inside their own supply chains, filling a gap that has stalled insetting.
Verra has launched its Scope 3 Standard. The rules let firms measure, check and certify the climate impact of projects run inside their own value chains. Verra is a Washington-based nonprofit set up in 2007. It writes standards and runs registries for carbon credits.
Scope 3 covers indirect emissions across suppliers and customers. For most firms it is the bulk of the footprint. More than 40 per cent of the world’s largest listed firms have net zero targets that include Scope 3.
The gap the standard fills
Until now those firms have had no independent way to certify cuts inside their own chains. So money aimed at supplier emissions has been hard to audit and harder to claim. The Scope 3 Standard is Verra’s answer.
Insetting has stalled for exactly that reason. A buyer paying a farmer to change practice could not prove the result to a third party. Auditors had no rulebook to work from, so many firms bought credits instead.
The cost of that gap is easy to miss. Money spent on a supplier cuts real emissions, yet the buyer could claim nothing for it. Money spent on a credit cuts emissions somewhere else, and the buyer could claim all of it.
How the units work
Projects under the standard use accounting methods adapted from Verra’s existing work. Outside auditors check each project and verify the emissions. Projects that pass then issue Scope 3 units, each one tonne of CO2 cut or removed.
The scheme runs alongside the Verified Carbon Standard. So developers can choose between Scope 3 units and normal carbon credits. That widens the buyer pool, and it widens the funding options for a project.
A staged rollout
Version 1 covers two areas, improved farmland management and low-carbon concrete. Developers can list on the Verra Registry under those methods now. Forestry, industrial fuels, super-pollutants and refrigeration will follow.
Later updates to version 1 will open registration, validation and verification for listed projects. The first Scope 3 units will be issued at that point. Version 2 will then set out how a firm proves a verified link between a project and a product it sells.
Built with the buyers in the room
Verra built the rules through its Scope 3 Initiative, launched in 2022. More than 100 experts took part. Pilot testing ran with firms including Bayer, Patagonia, 3Degrees, Rabobank, 3M, Diageo and the American Forest Foundation.
“The VCS Program taught us what it takes to build a standards program the market can rely on,” said Mandy Rambharos, chief executive of Verra. The new standard, she said, applies the same discipline to cuts and removals inside the value chain.
Fitting the existing rulebooks
Verra says the standard works alongside the rulebooks firms already report against. Those include the Science Based Targets initiative’s Corporate Net-Zero Standard and the Greenhouse Gas Protocol. The ISO net zero standard, the AIM Platform and TCAT also sit in that list.
Fit with those rules is the whole game. A unit that no rulebook counts has no buyer. Verra has learned that lesson before, and the wording here reads like a body that knows it.
What to watch next
The first issuance is the milestone that counts. Until units exist, the standard is a rulebook with no market behind it. Two methods also make a narrow start, given how much of Scope 3 sits in freight, steel and electronics.
Demand for carbon data firms can audit keeps growing, as recent funding for carbon accounting tools shows. Firms already measure their supply chains in some detail. What they have lacked is a way to bank the gain. If the units trade, that changes the case for paying suppliers to cut.
