Financial Firm Builds Credible Net-Zero Path for Small and Medium-sized Clients

Reaching net zero is a long-term journey, and many companies turn to carbon offsets to achieve climate targets. But inconsistent standards in the voluntary carbon market (VCM) create compliance and reputational risks, especially greenwashing. FinanceCo* sought to help its small and medium-sized enterprise (SME) clients establish a pathway built on integrity and transparency. We partnered with them to design a carbon mitigation solution that established a credible net-zero pathway and addressed the end-to-end decarbonization needs of SMEs.

FinanceCo identified four major obstacles to SMEs’ achieving their net-zero goals:

• Missing tools and frameworks: Practical tools to set targets and build credible strategies would allow SMEs to track and certify their net-zero efforts.
• Greenwashing risk: Uncertainty and inconsistent VCM standards raised assurance concerns.
• Low awareness of its carbon footprint and decarbonization pathways: A clear starting point and guidance on partnerships could ease SMEs’ path to net zero.
• Limited access to high-quality, green flagship projects: SMEs often lack a reliable way to source vetted projects, which could enhance their incredibility and raise their profile internally and externally.

To address these concerns, we codeveloped a customized framework of offerings aligned with the Greenhouse Gas Protocol and the Science Based Targets initiative that is designed to minimize greenwashing risks. A greenhouse gas measurement tool tracks Scope 1 and Scope 2 emissions for the year through the collection and entry of physical data (such as liters of diesel consumed) and economic data (such as the money spent on electricity). Science-based targets are set and displayed as a visualization of the maximum annual emissions that the company can generate to stay on track with its emissions goals.

To turn ambition into action for SMEs, we paired measurable interventions with market mapping and rigorous checks on partners and offsets:

• A breakdown of decarbonization interventions includes reduction actions and automatically calculates potential benefits, measured as carbon emissions saved.
• A market study enhanced awareness of decarbonization pathways and helped identify reliable partners and offset providers to support SMEs.
• We collaborated with FinanceCo to pinpoint partners’ flagship projects, ensuring they passed the most rigorous diligence checks before being offered to SMEs.

FinanceCo’s collaboration with its SME clients helps them accurately measure their carbon emissions, set credible reduction targets, and implement multiyear decarbonization plans. It also gives clients access, through a specialized partner, to vetted environmental projects that meet FinanceCo’s rigorous quality and long-term risk standards, with the option to fund them by purchasing internationally certified carbon credits. The program has earned positive coverage across leading media outlets. But more significantly, it establishes a scalable model that others can use to build their own decarbonization roadmaps.