A value chain is the complete set of activities through which a business creates value — from sourcing raw materials and designing products, to delivering them to customers and providing after‑sales support. Unlike a supply chain, which focuses on the flow of goods, the value chain highlights how value is added at each stage. It is both an analytical tool and a strategic lens: a way to see not just what a company does, but how each activity contributes to competitiveness, efficiency, and impact.
For businesses which want to be competitive and have a positive impact, the value chain is no longer limited to financial performance. It encompasses an environmental and social dimensions, recognising the value created when economic success is aligned with environmental impact.
Why It Matters
The value chain matters because it is the bridge between competitive advantage and environmental impact. By mapping each activity, organisations can identify where they differentiate from competitors, reduce costs, and innovate. This dual lens allows businesses to act strategically: strengthening their market position while delivering measurable outcomes.
From a climate and nature perspective, it provides a full lifecycle view, exposing emissions, resource use, and biodiversity impacts across upstream suppliers and downstream customers.
Value Chain Mitigation
The Science Based Targets initiative (SBTi) Corporate Net-Zero Standard states that:
“Companies must prioritize reducing emissions within their own value chains in line with science-based pathways”.
This principle means organisations are directly accountable for their greenhouse gas emissions across both upstream and downstream activities. Value chain mitigation covers suppliers, procurement, production, logistics, product use, and end-of-life treatment. It is the foundation of credible net-zero strategies because it ensures businesses are cutting emissions where they have the greatest responsibility and control.
Beyond Value Chain Mitigation
The same SBTi Corporate Net-Zero Standard defines beyond value chain mitigation (BVCM) as: “Mitigation actions or investments that fall outside a company’s value chain, which avoid or reduce greenhouse gas emissions, or remove and store greenhouse gases from the atmosphere”.
This principle recognises that businesses can and should contribute to systemic change beyond their direct footprint. BVCM includes financing nature-based solutions such as reforestation or wetland restoration, supporting renewable energy projects in regions outside the supply chain, investing in carbon removal technologies, or advocating for stronger climate policies. Importantly, SBTi identifies BVCM as a principle of credible climate leadership, encouraging companies to accelerate the global transition to net zero and nature positivity.
Businesses taking action today can demonstrate ambition, build reputation, and embed both responsibility and vision in their operations.
Benefits for SMEs
- Drives positive change across operations and supply chains.
- Creates impact in areas important to your organisation.
- Increases competitiveness in markets demanding sustainability credentials.
- Demonstrates responsibility for operations and vision beyond