Adjustments to baseline for the purpose of target setting

Criteria
1

Hello,

Due to the timelag in the data, FIs that are setting targets in 2022, may be using 2020 or 2021 as their base year. What is the proposed approach to address any material movements in a portfolio in 2022?

For example, a base year of 2021 is being used but in early 2022, some material counterparties left the portfolio. Should the FI remove these counterparties from the 2021 baseline for the purposes of setting the target?

Conversely, a base year of 2021 is being used but in early 2022, some material counterparties joined the portfolio. Should the FI add these counterparties on a like for like basis into the 2021 baseline?

To be clear, I am only suggesting this at the point of setting the target as the base year is in the past and may not be reflective of current state.

Many thanks,

Ana

2

Hi Ana, which method are you planning to use?

3

Hi Howard, this is most relevant to the SDA approach.

4

It is recommended to rebaseline as soon as possible if/when there are significant changes. If emissions data is not available yet for new counterparties, rebaselining may be done after annual emissions data is collected.

It is possible that the targets do not need to be changed after the rebaselining (e.g., the minimum target ambition remains the same or is lower than the target that is already set). If the targets do not need to be changed, then they would only need to be re-validated every five years, at a minimum.