Why OER is crucial in a credible net-zero strategy, and how to build yours
By
Director of Climate Science & Impact
7 min read
Why OER is so crucial for corporate climate action
Decarbonising your corporate emissions is essential work for the climate transition, but in 2026, many companies are finding that this does not go far enough.
Businesses that are serious about climate leadership are looking further afield, contributing to global climate action beyond their own operations in order to contribute to global efforts toward net-zero. That is what Ongoing Emissions Responsibility (OER) means in practice.
OER is the framework endorsed by the Science-Based Targets initiative (SBTi) for businesses to support global mitigation outside their value chain. It is not a replacement for reducing your own emissions, and it is not compensatory. It is a structured contribution to accelerating climate action at a global scale, running in parallel with your internal decarbonisation pathway. It is designed to recognise that even the most ambitious businesses will continue to produce significant emissions on their road to net-zero – and so provides an opportunity to address those emissions directly whilst contributing to broader climate goals.
A note on timing: this article relates to the latest instructions from the SBTi Corporate Net-Zero Standard V2. Previously, similar activity to OER was described as Beyond Value Chain Mitigation (BVCM) and did not form part of the net-zero standard.
SBTi endorsement has made OER the expected model
The new SBTi Corporate Net-Zero Standard V2, published in June 2026, sets out OER as a core expectation for businesses with science-based targets. Those that do not opt to participate in OER must explain why not during each 5-year validation cycle.
And whilst under the new Standard, OER only becomes compulsory for larger businesses from 2035, investors, regulators and procurement teams are increasingly using OER alignment as a signal of genuine climate leadership, and the direction of travel is clear: what is today's best practice is likely to become tomorrow's minimum standard.
For any business in a sector where ESG performance influences commercial outcomes - whether through RFPs, investor scrutiny or customer preference - having a structured OER strategy in place is becoming a practical competitive requirement (not just an ethical one).
From cost centre to contribution
One of the more significant shifts in thinking that OER requires is moving away from seeing climate investment as a cost to be minimised. A well-designed OER strategy is a structured contribution to global climate action that can be disclosed transparently, communicated credibly, and used to demonstrate leadership to the stakeholders who matter most to your business.
Businesses that lead credibly on climate attract stronger ESG-focused investor interest, perform better in tender processes with sustainability criteria, and are better positioned to retain talent in a workforce that increasingly expects employers to act meaningfully on climate.
What OER requires
OER has a clear structure. Understanding it is essential before you start designing your portfolio or setting a budget.
The first thing to know is that OER is not mandatory at the moment – though businesses must ‘comply or explain’ each time they do their target revalidation – and will only become mandatory for certain types of businesses after 2035.
There are three tiers of recognition: Engaged, Advanced and Leader, each having different requirements.
Recognition level | Coverage | Contribution budget approach | Application | Verified mitigation approach |
|---|---|---|---|---|
Engaged | 1% of total ongoing emissions | Covered emissions × carbon price per tonne (no mandated price) | OR | Verified mitigation outcomes equal in volume (tCO2e) to covered emissions |
Advanced | 10% of total ongoing emissions including 100% Scopes 1 and 2 | Covered emissions × minimum $20 USD carbon price per tonne | OR | Verified mitigation outcomes equal in volume (tCO2e) to covered emissions |
Leadership | Category A: 100% of total ongoing emissions Category B: 10% of total ongoing emissions (including 100% of Scopes 1 and 2) | Covered emissions × minimum $80 USD carbon price per tonne | AND | Verified mitigation outcomes equal in volume (tCO2e) to covered emissions |
Verified mitigation outcomes
Under the verified mitigation approach, climate contributions must support eligible ‘verified mitigation outcomes’ with a few stipulations. These must represent ex post (already delivered), independently third-party verified emissions reductions or removals, quantified in tonnes of CO₂e - like avoidance or removal carbon credits.
These must come from activities outside the company's value chain and include avoided emissions, protection or enhancement of natural carbon sinks, and/or carbon removals with storage. To qualify for OER recognition, the mitigation outcomes must also have been generated (the carbon credit’s ‘vintage’) within the five years preceding the reporting year.
Contribution budget approach
The second option is broader. Companies are encouraged to set a contribution budget (based on the amount of covered ongoing emissions multiplied by their set carbon price) and direct it toward further eligible activities.
These include (further) verified mitigation outcomes, ex ante mitigation funding, low- or zero-carbon research and innovation, funding for mitigation-enabling activities, adaptation and resilience, and loss and damage – recognising that supporting global climate action extends beyond the purchase of verified carbon credits.
Setting a carbon price
The overall scale of your OER investment each year is determined by your carbon price. This is an internal carbon price that reflects a justifiable fee per tonne which is applied to your ongoing emissions for the relevant period to generate your annual budget.
The SBTi under its three OER tiers provides guidance on the minimum amount this should be: for Leadership it must be $80 USD or more, for Advanced it must be $20 USD or more, and for Engaged it can be any amount, but with an advised figure of $20 USD per tonne.
For example, using a carbon price of £50 per tonne: a business with 1,000 tCO2e of ongoing emissions in 2026 would have an annual OER budget of £50,000 for that year. As emissions reduce through decarbonisation, the budget reduces proportionally, which creates a direct financial incentive to accelerate reductions.
A minimum credible carbon price is likely to be in the region of £20-60 per tonne, though the right number for your business will depend on your sector, emissions profile and decarbonisation timeline. The SBTi's previous Above and Beyond report includes detailed guidance on different approaches to setting a science-based carbon price and how to choose between them – but using the $20 and $80 figures for reasonable minimum prices is a good place to start.
How to design your OER portfolio
With a budget established and the goals understood, the next step is designing the portfolio itself.
Choosing an approach
Once your total OER budget is set, the next step will be to decide your level of recognition (informed by your carbon price and ongoing emissions coverage) and which path you’d like to take – verified mitigation outcomes, or contribution budget (or a combination of the two). This will allow you to explore what kinds of climate action you’d like to fund with your OER.
What carbon credit quality actually means
Unless your business intends to take the contribution budget approach and exclude ex post mitigation outcomes from it, you will need to purchase carbon credits. But not all carbon credits are equivalent, and the difference matters considerably for a OER portfolio. At Ecologi, we assess every project through our proprietary Carbon Project Assessment Framework (CPAF), which operates across three levels: the carbon standard, the methodology, and the project itself.
At the standard level, we supply credits from ICROA-endorsed standards only. At the methodology level, we are responsive to ICVCM CCP-Approval decisions. For example, when the ICVCM rejected most renewable energy crediting methodologies in 2024 due to additionality concerns, we discontinued supply from those methodologies as a direct result.
Project-level assessment is where the most important work happens. We score every project across three pillars - Climate, Nature and People - in two dimensions: quality and risk. Risk criteria are punitive in our scoring formula, moderating the overall score downwards To inform this, we work with all the leading carbon credit ratings agencies - BeZero Carbon, Calyx Global, Renoster and Sylvera - alongside satellite monitoring via Earth Blox.
Only projects scoring 80 or above out of 100 are eligible for funding through Ecologi. That threshold is what separates credits that will hold up to scrutiny from those that will not.
The removal trajectory
OER itself is not a mechanism for neutralising your own emissions – at least until you reach your net-zero year. But you should ramp up your removals proportion so that you are ready for neutralisation when the time comes. Best practice for any carbon credit portfolio is to eventually shift towards removals, so that your OER portfolio transitions into a neutralisation-ready portfolio by your net-zero date.
The Oxford Principles guide how a tonne-for-tonne portfolio should evolve over time so that businesses are ready for that end state. By progressively increasing the proportion of removal credits in your portfolio now - and within those removals, increasing the proportion with durable, long-lived storage - you are building towards the position you need to be in by your net-zero target date. The transition is gradual by design.
This matters practically because the supply of high-quality removal credits with durable storage is limited and prices are rising. Businesses that wait until their net-zero target date to begin shifting their portfolio towards removals will find themselves competing for scarce supply at elevated cost. Building those supplier relationships and forward contracts now is a material strategic advantage, not because your OER portfolio requires removals today, but because your net-zero neutralisation requirement will, and the time to prepare for that is well before it becomes urgent.
What good governance looks like in practice
An OER strategy is only as credible as the documentation behind it. Before you start purchasing credits or allocating a budget, it is worth establishing a basic governance structure: who owns the OER programme internally, how decisions about credit selection and budget allocation are made, and how contributions will be disclosed in your annual reporting. This does not need to be complex, but it does need to be consistent. Stakeholders reviewing your climate disclosures are increasingly looking for evidence of how you’re approaching carbon credits and climate action, and not just what you’re spending.
The risks of ad-hoc contributions
Businesses that approach OER without a designed strategy - making individual credit purchases reactively or allocating climate budgets without a framework - face specific, avoidable risks.
Underfunding
Without a science-based carbon price and a structured budget, OER contributions tend to be sized by what feels affordable rather than what is appropriate.
The SBTi's guidance on OER is explicit that the scale of contribution matters. A token gesture does not constitute genuine OER, and stakeholders (investors, customers, accreditation bodies) are increasingly sophisticated in their ability to assess whether a business's climate investment is proportionate to its emissions and commitments.
Misalignment with standards
The voluntary carbon market is not self-regulating. Without a deliberate approach to credit selection, portfolio composition and supplier due diligence, it is easy to build an OER portfolio that does not align with the Oxford Principles, does not meet ICVCM Core Carbon Principles, and will not hold up to scrutiny, and will not gain recognition from the SBTi or others.
Misaligned portfolios create reputational risk and may need to be substantially restructured as standards evolve. This is a costly and disruptive process that a well-designed strategy can help you avoid from the outset.
Regulatory exposure
As OER-style requirements move towards being formalised in standards like the SBTi's Corporate Net-Zero Standard, businesses with ad-hoc or poorly documented climate contributions will find themselves exposed. Businesses that have been making structured, documented OER contributions will have a much easier transition than those starting from scratch when new obligations come into effect.
What this means for your strategy next
Designing an OER strategy is the point at which your corporate carbon credit strategy becomes a coherent, long-term programme rather than a series of individual decisions. It requires a science-based carbon price, a clear budget, a planned approach to verified mitigation outcomes and budget contributions, and a portfolio designed to evolve in line with the Oxford Principles.
The next steps from here are practical: identifying high-quality carbon credits for your portfolio, selecting carbon credit suppliers with the due diligence processes to back them up, and designing a broader contribution strategy that works alongside that portfolio. Each of those steps is covered in the chapters that follow.
Work with Ecologi
Designing an OER strategy that is credible, cost-effective and aligned with evolving standards is not straightforward. The choices you make about carbon price, portfolio composition, credit quality and budget allocation all have material implications for both your climate impact and your business's exposure to risk.
Ecologi helps businesses design and implement OER strategies grounded in best practice - from setting an appropriate carbon price and building an Oxford Principles-aligned portfolio, to identifying the right contributions for your sector and stakeholder context. If you want to design an OER strategy that holds up to scrutiny and evolves with the market, speak to one of our climate experts to get started.