1.5 degree pathways for SDA methods

Hi there,

Since the SBTi has announced it will be mandatory for companies to commit to 1.5 degrees from July 2022, will the SBTi be providing updated SDA tools to align with 1.5 degrees such as for CRE and Mortgages? If yes, when are these expected to be released? Finally, would these be using the IEA Net Zero scenario?

Thanks!

Hi Vicky,

We do plan to integrate IEA NZ2050 scenarios into the existing SDA sector pathways, but the exact scope and timeline are still being determined.

Following up on this, is it required to use the SBTi WB2D scenario in order to get SBTi approval, or can another pathway (such as an NGFS scenario or the One Earth Climate Model output used by the Net Zero Asset Owners Alliance) be used and approved?

Thanks a lot

Hi there,
Is there any update on when the updated SDA pathways can be expected?

Thanks
Vicky

Hi there,

Following up on Vicky’s question, is there any expected date for the updated SDA pathway?

Thanks,
Ligia

Hi @Ligia,

Welcome to the community. Unfortunately we don’t have an ETA for this yet.

Hi Donald,

thank you very much! A few more questions:

  • since there is no timeline from SBTi yet, do you think this timeline for July 2022 will be extended?
  • if a client before July 2022 commits to targets using WB2D, would they be required to recalculate their emissions in the coming years?

Thanks,
Ligia

Hi there,

Is there any update on the query above?

Thanks,
Ligia

Hi Donald,

Please can i confirm that for real estate SDA targets we should be using v1.2 of the SDA tool for commercial real estate & residential mortgages.

I noticed in V2.0 of the standard tool residential/service buildings are available for 1.5 degrees.

Thanks

This forum is primarily focused on the framework for financial institutions, hence this does not apply, as a financial institutions cannot set WB2D targets.

Hi @Donald ,

I am not sure I follow. On the guidelines it says that

  • “Currently, the SDA uses the B2DS scenario from the Energy Technology Perspectives 2017 report, which comprises emissions and activity projections used to compute sectoral pathways aligned with limiting warming to well-below 2°C (IEA 2017)…5 Due to the
    lack of 1.5°C scenario data from IEA, only a well-below 2°C alignment is available for other sectors” (page 59), and
    *Targets on a mortgage portfolio are set using the global decarbonization pathway for residential buildings (i.e., the global floor area projections and emissions intensity pathways for residentialbuildings defined in IEA ETP 2017 B2DS)." (page 64)

Can you indicate what is SBTi suggested pathway for Mortgages and CRE, considering this information above?

Additonally, could you also confirm that a company setting a target in 2022 should have a target date ending between 2027 to 2037? As you can see below, the guidance for financial says 5-15 years, while the general guidance says 5 to 10 years.

Time frame:

  • Finance guideline: Portfolio SDA targets must cover a minimum of 5 years and a maximum of 15 years from the date the financial institution’s target is submitted to the SBTi for an official validation. Financial institutions are further encouraged to develop long-term targets up to 2050 in addition to the required midterm targets." (FI-C17.1)
  • General guidance: Targets must cover a minimum of 5 years and a maximum of
    10 years from the date the target is submitted to the SBTi for validation.
    FYI @Nettie

Both SDA tools can be used at the moment for real estate, with SDA v1.2 having the well-below 2C pathway (which remains the minimum ambition), but v2.0 can be used if you would like to set 1.5C targets for commercial or residential real estate.