VCMI’s threshold of 25% limit on the scope 3 emissions gap is based on the analysis of the Mission Possible Partnership (MPP) trajectories for hard to abate sectors versus the SBTi well-below 2°C pathway (i.e. 2.5% per year linear reduction).

The companies whose scope 3 emissions are largely dependent on these hard-to-abate sectors, who are making real efforts to decarbonize are expected, on average, to face a 25% emissions gap between their well-below 2°C emissions reduction trajectory and their observed emissions through time.

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The Scope 3 Action Code of Practice is designed to be applicable across sectors by focusing on core principles of high-integrity action on scope 3 decarbonization, rather than prescribing sector-specific pathways. The 25% emissions gap threshold was established using data from ‘hard-to-abate’ sectors such as steel, cement, and aviation—industries where rapid decarbonization is particularly challenging. This means most companies making significant efforts to reduce scope 3 emissions (approximately 75% of companies according to Accenture analysis) should be able to stay within the emissions gap limit established.

The Code provides a framework that allows companies to apply the guidance in a way that reflects their own operational context, value chain characteristics, and decarbonization strategies.

The Scope 3 Action Code of Practice is designed to provide companies with a high-integrity, practical solution to close the scope 3 emissions gap, encouraging increased speed and scale of scope 3 action now.

We recognize that currently many companies are not willing to make public statements of their climate leadership but do want to continue to act. Therefore, the Code does not focus on a company’s ability to make a formal assertion but provides them with the tools to confidently close the scope 3 emissions gap and use carbon credits in a manner consistent with best practices.

Companies can use the Scope 3 Action Code of Practice as a framework to guide their actions to address scope 3 emissions as they transition to net zero. In particular, the Code highlights the critical role high-quality carbon credits can play in this transition, in parallel to steps to reduce value chain emissions. While it does not provide a formal claim, companies can communicate that they are following the Code as a best-practice approach when purchasing high-quality carbon credits to close their emissions gap, complementing their broader strategy to reduce scope 3 emissions.

They may also explain how they are aligning with the high-integrity principles outlined in the Code, demonstrating their commitment to responsible carbon credit use and their decarbonization efforts. VCMI will provide companies with supplementary guidance on communicating their alignment with the Scope 3 Action Code of Practice.

No. We’re saying companies can use high-quality carbon credits to close the emissions gap when they are not following a scope 3 emissions trajectory consistent with their net zero commitments. The Scope 3 Action Code of Practice addresses companies’ progress every year during the implementation period up until the near-term emissions reduction target year.

It establishes a best practice dual approach for companies to work on direct emissions reductions and use carbon credits to address unabated scope 3 emissions to close the gap while investing in measures to get back to their science-aligned decarbonization pathway. These carbon credits should be reported separately and not used to measure progress against scope 3 targets.

By using high-quality carbon credits to take action every year they until they are back on their decarbonization pathway, companies deliver the speed and scale of global climate action that is required.

The Scope 3 Action Code of Practice serves as a stepping stone toward achieving Silver, Gold or Platinum Carbon Integrity Claims, ensuring companies consistently advance towards full decarbonization.

The Scope 3 Action Code of Practice is available until 2040, by which time companies will be expected to have eliminated their scope 3 emissions gap. The use of high-quality carbon credits can then transition to enable companies to raise ambition, go beyond what is required of their decarbonization targets and invest in activities that accelerate progress to global net zero.

The 2040 phase out year was based on an analysis of the Mission Possible Partnership (MPP) mitigation pathways for companies making efforts within seven hard-to-abate sectors. When looking at the MPP average sectoral decarbonization pathway, a tendency of the increasing emissions gap was seen until 2030, when the gap peaks at 24%. Then, a gap-closing trend emerges, with the gap fully closing by 2038.

The fact that the MPP data focuses on hard-to-abate sectors means that the conclusions above are conservative. With that in mind, the 24% result is interpreted as representing the maximum distance acceptable, between the present and the phase-out year, for scope 3 emissions to lie above a well below 2 degrees pathway. The 2038 result is interpreted as the year in which decarbonization barriers are overcome with respect to the well below 2 degrees scope 3 objectives.

Following feedback from a public consultation which ran in 2024, to acknowledge and account for fluctuations and uncertainties, 2040 was adopted in the Scope 3 Action Code of Practice as the phase out year.

Further analysis of this is outlined here.

Both the Scope 3 Action Code of Practice and SBTi’s Corporate Net Zero Standard emphasize the importance of reducing emissions through direct decarbonization. The updated version of SBTi’s Standard is still under development but appears to recognize the role of carbon credits as a complementary tool for addressing unabated/ongoing emissions, as well as to address residual emissions at the point of net zero. This will align with the Code of Practice – carbon credits are not an alternative to decarbonization, they are a solution to close the gap when scope 3 decarbonization hits barriers, while companies invest in measures to get back to their decarbonization pathway, and deliver the speed and scale of global climate action that is required.

The Code requires companies to set near-term science-aligned decarbonization targets and limits the reliance on carbon credits to ensure that they are used in a way that complements genuine emissions reductions.

The Scope 3 Action Code of Practice was developed through a robust consultation process, with more than 1,000 comments received and reviewed. Key themes around complexity, reputational risks, and incentives for companies were discussed with VCMI’s Expert Advisory Group and used to inform road-testing with the World Business Council for Sustainable Development (WBCSD) and the Boston Consulting Group (BCG). Insights from this process led to final updates reflected in the Code. The full results from the public consultation report are available here.

As a result of the consultation, some options, like focusing on scope 3 emissions outside target boundaries or no limit for the scope 3 emissions gap were removed from the document, while other options, like the Carbon Budget approach, were brought into the core methodology. Improvements on how to clearly communicate the methodology, in texts and graphs, were also suggestions from the public consultation respondents.

So far the International Chamber of Commerce, We Mean Business Coalition, Natura, Leaf Coalition, Christiana Figueres, and EDF have supported the Code, alongside the UK, Panama and Peru governments welcoming VCMI’s work to increase corporate action on scope 3 emissions.

The Scope 3 Action Challenge, launched by VCMI and supported by the International Chamber of Commerce, calls on signatories from across business and civil society to drive a step change in scope 3 decarbonization, recognizing that the scope 3 emissions gap is growing larger and elevating the urgency of scope 3 action to reach the goals of the Paris Agreement.

At this crucial time in the run up to COP30, the Challenge provides recognition for actors committed to tackling scope 3 emissions and signposts practical tools for companies to take action. Signatories will sign a pledge  which commits to:

• Acknowledging the urgency of closing the scope 3 emissions gap and the growing risks of inaction.
• Supporting the use of all credible solutions to accelerate corporate decarbonization.
• Committing to transparency and accountability in their climate strategies.
• Joining a collective movement of leaders demonstrating ambition and action.

VCMI’s Scope 3 Action Code of Practice is one aspect of a comprehensive menu of tools, mechanisms and guidance highlighted by the initiative to support companies to accelerate action on scope 3 emissions.

Partners launching the Pledge support the capacity building and solutions for increased Scope 3 Action: International Chamber of Commerce, We Mean Business Coalition, Verra, Emergent, GenZero, Carbon Markets Institute, Anthesis, Patch, Climate Impact Partners, and CNaught. Corporate leaders from around the world are encouraged to sign up to the pledge.