To support consistent interpretation of VCA eligibility across industries, The Change Climate Project is clarifying the treatment of software expenditures for companies with significant Scope 3.15 (Investments) emissions. Unlike other Scope 3 categories, Scope 3.15 emissions can represent a large share of a company’s total footprint while offering limited direct levers for abatement. In specific cases where software tools are used to directly drive lower-emissions investment decisions—and where the implementation of those decisions is nearly costless—the software spend itself can reasonably be considered the primary decarbonization action. As such, these expenditures may be eligible under VCA category, provided they meet the criteria outlined below.
Historically, software and consulting fees have been categorized under Other Contributions when they serve as indirect enablers of decarbonization—i.e., when the primary emissions-reducing activity takes place several steps removed from the expenditure itself. Common examples include general net-zero consulting services or tools that provide directional guidance without delivering or triggering a specific emissions reduction.
However, for companies with material Scope 3.15 emissions, the context is meaningfully different. These firms often exhibit high GHG intensity relative to other service firms of similar size, yet face more constrained options for abatement. Certain software tools targeted at financial services and investment firms now offer robust capabilities to directly inform low-emissions investment decisions. When a software tool results in immediate and nearly costless implementation of decarbonization actions—for instance, by screening investment portfolios based on emissions criteria or automatically routing capital toward low-carbon alternatives—we consider these expenditures to meet the definition of VCA. In such cases, the expenditure itself is the decarbonization action, not a precursor to it.
This treatment is a narrow exception. To avoid misuse or over-extension of this rule, we are limiting eligibility to firms with significant Scope 3.15 emissions, where the software or consulting service is demonstrably tied to emissions-reducing decisions directly within the investment value chain.
Criteria for VCA Eligibility of Software Spend (Scope 3.15 only)
To be included as a VCA expenditure, software or consulting spend must meet all of the following:
Company has material Scope 3.15 emissions as reported in their carbon inventory.
The software or service output directly informs a decarbonization action—for example, reallocating capital, excluding high-emissions investments, or redesigning portfolios toward lower GHG intensity.
The action enabled is nearly costless to implement, such that the software/service expenditure itself represents the majority of cost associated with the emissions reduction, and the transaction cost itself is low or zero.
Documentation must be provided that clearly explains the mechanism by which emissions reductions are achieved and the share of emissions affected.
This provision does not extend to general-purpose ESG software, analytics tools, or net-zero strategy consulting, which remain categorized under OC.
This clarification aims to provide a reasonable pathway for high-emitting financial and service-sector firms to take tangible action while maintaining the integrity of VCA as a category for direct abatement expenditures.