Why Should Companies Support Climate Protection Projects? 10 Good Reasons

The market and the public have their doubts: should we be supporting climate protection projects? myclimate responds: yes, absolutely, and sooner rather than later. Here, myclimate offers ten reasons why climate protection projects are important.

In this article, we will explain why financing of climate protection projects outside a company’s own value chain ("beyond value chain mitigation", or BVCM) is a good idea alongside internal reduction measures, why companies that finance genuine projects aren’t greenwashing and how to communicate these activities with a credible claim, and why the world urgently needs the private sector to close the global financing gap – along with six other reasons for climate protection projects.

1. Global Financing Gap: Why Climate Protection Needs the Private Sector

We haven’t made enough progress in addressing the climate crisis. There's a significant gap between the levels of climate mitigation and climate finance committed globally so far, and what we need to limit global warming to 1.5°C.  


There is no doubt about it: to stand back and do nothing would be much, much more expensive. 

Climate protection measures (mitigation): The Climate Policy Initiative suggest we need annual climate mitigation finance in excess of USD 8.4 trillion per year between 2023 and 2030, rising to as much as USD 10.4 trillion per year in the following two decades. Currently, just USD 1.2 trillion is flowing directly into climate protection measures, which is just a seventh of what we actually need right now.  

Economic consequences: A wide-ranging study from spring 2024, published in Nature magazine, ruthlessly reveals the economic consequences of a «business-as-usual» scenario. At six trillion dollars a year, the economic damage will be at least six times more expensive than the climate protection investments required to avoid it. 

Adaptation measure: The effects of climate change are already being felt more strongly in countries of the Global South than in those countries that are primarily responsible for the high CO2 concentration in the atmosphere. The lower the global temperature remains, the lower the costs for any adaptation measures in the countries of the Global South. The current estimate of costs from the UNEP is USD 215–387 billion per year until 2030.  


And that’s why the global climate urgently requires additional support from the private sector. The financing of climate protection projects in the global south assists countries that lack the resources for reaching their climate targets and facilitates direct climate protection. Climate protection projects, particularly nature-based solutions, can help greatly reduce the effects of climate change, which we are already feeling today. Climate financing thus also contributes to climate justice in the sense of the polluter pays principle, as those countries that have contributed the least to climate change in the past (and often still do today) suffer the most. 

2. Time-consuming Reduction Measures Combined with Immediate Impact: Why Beyond Value Chain Mitigation is Important

Emissions abatement within company value chains (Scope 1, 2 and 3 under the Greenhouse Gas Protocol Standard) is an absolute must. Every company needs a strategy and corresponding measures for reaching net zero emissions as recommended by organisations like the Science Based Targets Initiative (SBTi), and which many companies have already successfully implemented (see graphic). 

But this crucial transformation to a climate-friendly, resource-efficient economy – also known as decarbonisation – requires a lot of time. This is a process that takes years, and meanwhile, greenhouse gases are being emitted all the time. Reducing emissions within company value chains (Scope 3) is particularly challenging. 

That’s why it’s important that companies finance climate protection outside their own value chains at the same time, as the SBTi is advocating.  

Companies should take action or make investments outside their own value chains to mitigate GHG emissions in addition to their near-term and long-term science-based targets.

SBTi, Above and Beyond

For some years now, this concept has been known as “beyond value chain mitigation” (BVCM). But what exactly does beyond value chain mitigation mean?  


Beyond Value Chain Mitigation (BVCM) 

According to the SBTi Corporate Net-Zero Standard, “beyond value chain mitigation” (BVCM) refers to mitigation actions or investments that fall outside of a company’s value chain, and which complement internal efforts. This includes activities for preventing or reducing greenhouse gas (GHG) emissions (avoidance), and for removing and storing GHGs from the atmosphere (removal). 

The Gold Standard foundation has its own definition of BVCM: “In the transition to net zero, companies should take action to mitigate emissions beyond their value chains. For example, purchasing high quality credits or investing in direct capture (DAC) and geologic storage.”

In this article, when BVCM is mentioned it primarily refers to climate protection projects. 

Ideally, climate protection projects should be financed to the same extent as the company’s footprint (tonne-for-tonne approach), in the amount of a climate fund financed through an internal CO₂ price (money-for-tonne approach) or a certain percentage of company profits (money-for-money approach). Some companies are even paying climate protection contributions today for emissions in the past (historic responsibility). 

You can find detailed information in the FAQ "What does beyond value chain mitigation mean?"


This means that companies should complement the time-consuming process of internal reduction by supporting climate protection projects and taking responsibility for their own current footprint. 

3. Halving Global Emissions by 2030: Why Companies Should Invest in Climate Protection Projects Beyond Their Own Value Chains NOW

Considering the urgency of the climate crisis, supporting climate protection projects beyond the company’s own value chain BVCM) in parallel with internal transformation is essential. In a report entitled “Above and Beyond”, the SBTi highlights two clear goals that need to be supported with BVCM: “Deliver additional near-term mitigation outcomes to achieve the peaking of global emissions in the mid-2020s and the halving of global emissions by 2030.” And, in summary, drive additional finance to scale up nascent climate solutions required to achieve the required systemic transformation. 

As such, the Science Based Targets initiative (SBTi) recommends the support of mitigation measures beyond the company’s own value chain – and with even greater urgency than it did in 2021 when it launched the concept of BVCM – and calls on other companies to follow suit: 

There are an insufficient number of companies funding and delivering BVCM consistently and at a scale commensurate with the magnitude of the climate crisis

SBTi, Raising the Bar

In other words, until all companies have reached net zero, the financing of climate protection beyond a company’s value chain offers an appropriate link which helps bridge two major gaps in current climate protection efforts:  

  1. insufficient funds or inadequate policies for climate protection and climate adaptation (financial or action gap, see section 1) 
  2. insufficient targets to date (ambition gap)

The Voluntary Carbon Markets Integrity Initiative (VCMI) also underscores the enormous time pressure in stark words: 

So if you take the case of science based targets initiative, for example, most companies have set targets for 2030. But we don’t want to wait until 2030 for companies to decide to invest in carbon credits or to demonstrate that they're meeting their targets. We need investment in 2024, 2025, 2026 if we want to have any chance of keeping below 1.5 or even below 2 degrees.

Mark Kenber, Executive Director of the VCMI (Voluntary Carbon Markets Integrity Initiative)

Ideally, the financing of external climate protection measures (BVCM) will complement comprehensive internal reduction efforts. 


Here, supporting climate protection projects is of particular interest to smaller companies, as long as communications around them are transparent and accurate. It’s a point emphasised by both the independent NGO Carbon Market Watch, which casts a critical eye over developments in the voluntary carbon market, and the equally independent think tank NewClimate Institute. It's often smaller companies in particular that (still) lack the resources for immediate reduction measures. What’s more, purchasing certificates is quick to arrange and easy to quantify, and we have an established, constantly improving tool in the form of the voluntary carbon market. 

4. Meeting Expectations: Why The Private Sector Needs Climate Protection

The private sector needs climate protection, too. Not just because it’s “the right thing to do”, but also because both internal and external stakeholders expect it. In the future, climate protection will receive greater support in the corporate context and increasingly become a prerequisite.  

And remember, a company’s stakeholders include the existing workforce (particularly younger employees) and the in-demand talent of the future. But they also include the company’s own customers – end consumers as well as B2B customers, many of whom are already imposing increasingly strict requirements on their suppliers. Investors expect companies to make a commitment to effective climate protection and offer proof of real-world activities. And the political sphere is already advancing at various levels (see points 5 and 6).  

So as we’ve seen, multiple stakeholder groups are calling for credible, extensive climate protection commitments from companies, which includes their support of external climate protection solutions.  


“Avoid – Reduce – Finance”  

myclimate believes in comprehensive climate protection solutions, and its message to clients is: “avoid – reduce – finance”. We achieve this through education, advisory services for reduction pathways, and our range of effective climate protection projects. myclimate’s investment in climate protection projects pays off for a company’s reputation, because we select projects according to strict quality criteria and only after intensive due diligence checks (see reason 7).

5. “Credible Climate Claims”: Why Climate Protection Projects are Perfect for Corporate Communications

In their recent publications (see sources at the end of the article), the most important independent organisations advocating for transparency and credibility in climate protection markets – including the Science-based Targets initiative (SBTi), Gold Standard, the independent market observer Carbon Market Watch, the Voluntary Carbon Markets Integrity Initiative (VCMI) and Oxford University – recommend communicating voluntary climate protection commitments in the form of “credible climate claims”. Carbon Market Watch writes: 

Claims must be credible, clear, unambiguous, informative and complete.

Carbon Market Watch

The myclimate «Impact Label» meets the requirements of a credible climate claim. myclimate has deliberately moved away from terms such as “climate neutral” and “offsetting”, as these are now increasingly associated with “greenwashing”. 


So from “climate neutrality” and “offsetting” we turned to “climate protection contribution” and “financing climate protection” and therefore “climate protection impact”, making myclimate a pioneer in the sector back in late 2022, and it has also recommended that all its partners and clients make a similar change. 

Our “Impact Label” meets established standards for criteria such as the traceability and uniqueness demanded by the EU Green Claims Directive which is expected to come into effect in all EU member states in 2025.

But myclimate is going further. In the future the label will also reflect companies’ internal reduction measures – referring to efforts within Scope 1, 2 and 3.  


As well as calculating, reducing and financing climate protection, we also help clients educate their own employees. We offer companies advice on credible climate protection communications that contribute to their brand (see The way to become a Net-Zero company).

In all cases, myclimate categorically recommends both introducing internal reduction measures and supporting climate protection projects. When both are done together this ensures effective climate protection which can (and should) be transparently communicated as a credible climate protection commitment.  

The renowned climate scientist Reto Knutti, Professor for Climate Physics at ETH Zürich, who has frequently been critical of (poor) climate protection projects and climate neutrality claims of late, takes a nuanced view:

I believe you shouldn’t throw the baby out with the bathwater (...). Financing climate protection projects in other countries can be justified if it's done well. But it becomes a problem when we try to have it credited against our own emissions. If I HAD to fly, I would offset my flight with Southpole or myclimate and I could say I've done something good for the world, but I can't say that I'm carbon neutral.

Reto Knutti, Professor for Climate Physics, ETH Zürich, quote from “Echo(s)” podcast, 1 April 2024

6. “Greenwashing” Critique: Why Companies need to act Pre-emptively with Climate Protection Projects

Companies that seek to complement their path to net zero by supporting climate protection projects, and which communicate these efforts, are often faced with accusations of greenwashing. But this critique is often misdirected.  

External independent studies as well as myclimate’s experience with long-term clients point to one unmistakable fact: the individuals and companies that take responsibility for their residual emissions today by paying climate protection contributions are generally highly conscious of their footprint and they seek, wherever possible, to ensure their activities are climate-friendly and forward-thinking.  

According to a 2023 study by Trove Research, companies that voluntarily decide to support climate protection projects are also almost twice as far along the path to decarbonisation of their companies compared to companies that don’t.  

This was echoed by the findings of the independent market monitoring organisation “Ecosystem Marketplace” in another 2023 study. It revealed that companies that voluntarily enter into commitments are moving more quickly in the direction of climate protection. Companies that purchase voluntary emissions certificates, for example, are more likely to have targets in place for combating climate change than those that don’t, and their targets are more ambitious: 

  • They are 3.4 times more likely to have a scientifically grounded climate target.
  • It's 1.2 times more likely that the company’s board oversees its climate protection targets.
  • They are three times more likely to have incorporated Scope 3 emissions into their climate target.  

Like the Trove Research study, Ecosystem Marketplace came to the conclusion that companies that voluntarily purchase emissions certificates are decarbonising twice as quickly compared to those that don’t (see graphic below). 

Accusing companies that are not (yet) “perfect” in all areas of climate protection of greenwashing mainly serves to benefit those companies that have so far done nothing for climate protection. These companies, who really are deserving of criticism, benefit from this in two ways. On the one hand, they maintain distance from a necessary if uncomfortable public debate. On the other, they save themselves time and money by not investing in climate, social or environmental standards. They can use these savings to make their products and services cheaper or more profitable. This gives them a clear, unfair advantage over companies that are already investing time and money in climate protection.  

But as time goes on, governments are exerting greater influence on corporate management in the area of climate protection. This is in line with a highly reasonable principle: companies that are making a credible commitment right now deserve a market advantage. The tool of beyond value chain mitigation is designed to play a role in climate protection and sustainable corporate governance in accordance with guidelines from the European Union among other bodies and – where it is implemented transparently and traceably with high-quality projects – give forward-looking companies a competitive advantage.


Forward-looking companies already see BVCM climate protection projects as an effective tool for recording their own climate impact as an internal line item in their balance sheet. Along with their efforts to reduce their own emissions, BVCM can make a significant contribution towards a net-zero climate strategy. This gives companies the experience to set a price on remaining carbon emissions. With this approach it's easy to derive binding, transparent targets for responsible management.  

So forward-looking companies set themselves apart by doing the one thing (reduction measures) without neglecting the other (investing in climate protection outside their own value chains).   

7. Minimising Risk: How Beyond Value Chain Mitigation and Careful Project Selection Boost Credibility

There are plenty of good climate protection projects. With the right preparation, risks around the actual effectiveness of projects – and with it the company’s reputation – can be greatly minimised. 

You can find detailed information on the site here: What do companies need to know when selecting effective climate protection projects?

In principle, myclimate focusses on community-based projects. These projects place a strong emphasis on the participation of local people and contribute to many other sustainable development goals (SDGs) in addition to CO2 reduction. 

When it comes to choosing credible climate protection projects, it’s important to consider the following three points:  



Projects should be certified according to high-quality standards. That means “Gold Standard” in the energy field and “Plan Vivo” in the land use field, in exceptional cases VCS+ as well.
The following key quality criteria are a must:

  • additionality and permanence 
  • social integrity and/or participation
  • additional positive impact in the area of sustainability (see: How does myclimate measure contributions to the SDGs?)
  • direct benefit to the local community at the project location (community-based) 
  • environmental integrity and safeguarding principles
  • annual monitoring
  • monitoring verified annually by an independent third party (every five years for LUF projects) 


High Integrity

In April 2024, the Integrity Council for the Voluntary Carbon Market (ICVCM) issued the “Gold Standard”, one of the first standards to meet the demanding criteria set out in the Core Carbon Principles (CCP).


Due diligence 

s well as the criteria demanded by the standards, every project should be subjected to close scrutiny. This can be achieved with preliminary due diligence checks. This goes far beyond the requirements of the standard in question, and for myclimate it is standard practice (see our FAQ How is a climate protection project developed and its long-term effectiveness guaranteed?). We conduct this due diligence check before we incorporate a project into our portfolio (also factoring in our own financial risk considerations).  



myclimate also recommends close, long-term dialogue with the project managers on the ground who speak the local language. The climate protection developer itself - i.e. the organisation that sells the CO2 certificates such as myclimate - should be a non-profit organisation and not be out to make a profit. And all project activities – including objectives, certificates and the use of funds – should be transparent.  

Another important consideration is that support should go to projects that have benefits both domestically and in the global south, where there is minimal access to climate funds. Climate justice is another factor here (see box).  

Climate Justice 

Low-income countries frequently bear the least responsibility for climate change, yet they are subject to much higher temperature fluctuations and more frequent temperature anomalies than high-income countries, with devastating consequences, particularly in agriculture. To reduce risks and maintain the company’s credibility, it's important to factor in a fair allotment of the costs of climate change (“climate justice”) and the involvement of socially disadvantaged groups in the implementation of climate protection projects and in compiling a portfolio of BVCM activities. 


Further very detailed information on how myclimate selects, develops, supports and monitors the effectiveness of projects can be found here: How does myclimate develop projects and ensure their effectiveness?

8. Net Zero by 2050: Why a Combination of Avoidance and Removal Programmes is Essential for Climate Protection

The largest, and currently most pressing task on the path to net zero by 2050, is avoiding existing emissions (avoidance or abatement). This relates both to emissions within the company’s own value chain, and those beyond its value chain (BVCM) for which it can take responsibility through reduction measures. The Oxford University writes:

Emission reduction projects will have an important role to play over at least the next decade on the path to net zero.

Oxford University, Oxford Principles for Net Zero Aligned Carbon Offsetting

Only after this task has been tackled to a sufficient degree, to the benefit of local populations and project countries, should the goal shift to incorporate use of qualified carbon sinks to remove those residual emissions that cannot be readily prevented (removal).  

In practice, the removal approach is neither widespread, straightforward nor economically viable at present. Many sink projects, particularly the more technical approaches (e.g. direct air capture and storage) are still in an early development phase and will require extensive financing if they are to achieve technological maturity and the necessary scalability by 2050. Financing this form of technical removal may be a relevant element in efforts to meet net zero targets, but this cannot come at the cost of projects for reducing emissions, as the following graphic shows: 

In other words, we “only” need removal projects for the emissions that humanity has already released into the atmosphere. The more we avoid at relatively low cost – by investing in avoidance projects – the less need we will have for expensive removal, which is not yet readily available or reliable. That's why myclimate recommends financing abatement projects in the short and medium term, and for the medium to long term, developing a portfolio that fulfils both requirements and which can be adapted as required over the coming decades. 


myclimate seeks to reflect the need for different project types in its portfolio of climate protection projects. The greatest need at present is the financing of projects for avoiding emissions (avoidance) that would persist were it not for these projects. This has been myclimate’s area of specialism for many years, in part because these high-quality projects have a major impact beyond just climate protection indicators, for example in improving quality of life. These projects include all stove and biogas projects, forest conservation and moorland projects.  

At the same time, for some years now myclimate has been focusing on natural sink solutions such as the (re-)forestation of woodlands and humus conversation in arable soil. In contrast with technical removal projects, these projects are extremely important in the short term and already have great potential for scaling up. Beyond binding CO₂ emissions, projects such as this also help support other important SDGs such as the promotion and protection of biodiversity. 

In the coming years, the myclimate portfolio will expand beyond projects for avoiding emissions, which remain important, to include the scaling up of technical removals (biochar, for example) and nature-based removals. This means myclimate will meet the requirements for successful climate protection under the net zero targets of companies. 

9. What About Forest Projects? Why We Won’t Reach the 1.5°C Target Without (Good) Forest Projects

In recent years, international forest projects have received plenty of attention as well as criticism – both justified and unjustified. For context, it's important to remember that humanity needs to conserve existing forests and plant new forests if it wishes to reach the 1.5-degree target. Consequently, sforests have played an important role in climate protection since the Kyoto Protocol. These nature-based solutions aim at either conserving existing forests to prevent carbon emission from deforestation (avoidance), or reforestation, which binds carbon from the atmosphere and stores it as carbon in biomass (removal).

High investment costs (reforestation, care, etc.) make reforestation projects significantly more expensive than forest conservation. And even with proper implementation (domestic tree species, which tend to grow slowly) it takes a long time until the effects are felt. On the other hand, forest conservation – the clear prevention of deforestation and loss of biomass – is effective right now, and it delivers extensive biodiversity benefits. 


myclimate supports both approaches, avoidance and removal, in Africa, Asia and South America and in Switzerland, Germany and Austria.


For forest conservation in particular, it's important to choose the right projects – those that prioritise the commitment of local authorities and benefits for local communities. The projects must prove that they promote sustainable livelihoods and the development of the community. It is only when the community sees the direct benefit of preserving or even restoring the forest that the long-term retention of the forest is assured. 

As such, myclimate also applies the strictest project selection criteria to forestry projects and only considers high-quality standards, specifically “Plan Vivo” and in a few, well-chosen exceptions, VCS – and only when they are additionally certified under CCB (Climate, Community & Biodiversity) and/or SD VISta (Sustainable Development Verified Impact Standard) standards.  

Without forest projects – protection and reforestation – we will not be able to achieve the global climate targets, nor will we be able to effectively tackle other challenges such as the fight against biodiversity loss or protection against extreme weather events.

Dr Kahlil Baker, CEO of Taking Root and co-founder of the Plan Vivo-certified reforestation programme “CommuniTree”

10. Resilience Within the Value Chain: Why Climate Protection Projects are also Economically Beneficial for Companies

With the right approach, additional support for climate protection projects beyond the company’s own value chain can offer a range of tangible benefits. Selecting projects carefully is extremely important here. The priority should be on projects that, although they lie beyond the company’s own value chain (in contrast to carbon insetting projects within the value chain, which myclimate also develops for clients), still have an indirect impact on the company and its environment. This includes, for example, a positive effect on the regions close to the company’s own value chain. 


A specific example of this would be a company in the food and agriculture sector that finances projects outside its own value chain for renaturation of landscapes. These projects not only contribute to the positive development of the climate, they also have a diverse impact on the surrounding ecosystems. These ecological improvements can, in turn, have a positive influence on the company’s own growing regions and thus increase the resilience of the company’s entire value chain in the long term. 


So this kind of integrated approach not only strengthens the resilience of ecosystems and the local population, it also helps boost the local economy. Ultimately, the immediate environment upon which the success of the company largely depends also benefits from this type of climate protection initiative. Die SBti schreibt in Above and beyond:  

Financing BVCM, if done right, can unlock an array of opportunities, mitigate future risks and protect and enhance long-term value.

SBTi, Above and Beyond

Summary: Doing the One, not Neglecting the Other – or, How Exactly Should A Company Proceed?

As we have seen above, now more than ever there is an urgent need to take responsibility for our current footprint. For this, companies should ideally take a five-step approach,as set out in the graphic below.  

Companies should begin by simply assessing the status quo by determining their initial corporate carbon footprint (CCF) or product carbon footprint (PCF), which they can use as the basis for developing targets and measures. A jointly developed climate strategy then defines the long-term schedule while also focusing on the risks resulting from climate change and the opportunities that arise from reduction projects. Third, it's important not to forget the education, involvement and motivation of employees. Fourth, at the same time the private sector has to take responsibility for its emissions and invest in climate protection projects beyond its own value chains (BVCM) – ideally in countries in the global south. Finally, climate protection commitment needs to be communicated and reported on in a way that is both credible and transparent.  

There are numerous other opportunities for targeted climate protection in companies, both large and small, vividly illustrated in the guided tour or free tour. The options range from individual measures to a comprehensive strategic and integrated approach. 

Calculate your emissions, reduce your carbon footprint and support effective climate protection projects

Caculate now


Stay informed!