Are all "Required Activities" in Table 5.2 required to be covered by the submitted target?

This is ShiWei comes from Taiwan, having the question about setting financial institution’s scope 3 investment and lending activities targets to understand.

The financial sector Criteria FI-C15 mentions: ” All financial institutions shall set targets on their investment and lending activities as required by FI-C16."But the document FINANCIAL SECTOR SCIENCE-BASED TARGETS GUIDANCE Version 1.0(https://sciencebasedtargets.org/resources/files/Financial-Sector-Science-Based-Targets-Guidance.pdf) p.98 also mentions:

Given that current methods do not cover all asset classes or sectors on FIs’ portfolios and that the target boundary requirement remains flexible on certain financial products, FIs are required to disclose the coverage of their total investment and lending activities by SBTs in the target language (C18) using an economic or emissions metric that is representative of the magnitude of their main business activities.

Additionally, in practice, we have seen that many financial institutions that have set SBTi targets, such as Amalgamated Bank, Eurazeo, La Banque Postale, and KB Financial Group, have not set targets for all of the Required Activities in Table 5.2. They have only set targets for some of the Required Activities and have disclosed the percentage of total investment and financing activities for which targets have been set. Does this mean that if financial institutions cannot calculate the carbon emissions of all SBTi’s Required Activities using existing methodologies, they can only set targets for those items that can be calculated and disclose their coverage of all investment and lending activities?

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Hi ShiWei,

All required activities must be covered by targets according to the FI Guidance criteria and all validated targets from FIs have met these requirements.

The excerpt from page 98 you mentioned refers to the fact that not all asset classes are currently required (e.g., sovereign bonds are currently out of scope, residential mortgages are currently optional) and that the target boundary requirement may be less than 100% for specific asset classes (e.g., 67% for corporate loan: commercial real estate) currently.

Thanks,
Howard

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