Asset manager with equity REIT activities

Hello,

I represent an asset manager with some equity REIT activities (only a small share of the total AuM).

Could I please have some guidance on whether these activities should be:

  • considered separately to financed emissions (i.e. treated as our Scope 1 and 2 and Scope 3 downstream leased assets)
  • considered as financed emissions, with the target pathway set by the SDA approach for real estate

Hi @kanga,
Welcome to the community and thanks for your question.

Table 5.2 (p. 56) in the SBTi-Finance guidance states that you can use SDA, portfolio coverage and/or temperature rating to set targets for the REITs that you manage and that you are required to include them in your target if you want your targets to be validated and approved by the SBTi.

Hi @Donald.

Thank you for your rapid response.

I did see you respond to similar questions in the forum with the same response, but for me, there was some doubt:

  • Upon reading the latest PCAF guidance on accounting for GHG from real estate, as we own and have operational control over the underlying assets (buildings) in the REITs, the emissions from our real estate portfolio should technically be in our Scope 1 and 2 (for e.g. common areas) and Scope 3 downstream leased assets for tenant related emissions.

  • Also for example in the Q&A 3 on page 27, it says that direct investments in real estate fall into the asset manager’s Scope 1 and 2.

  • In the SBTi’s financial sector guidance (page 19), it is explicitly stated that the approach is designed for mortgage REITs, but that equity REITs should follow the SBTi’s process for regular companies.

Given the above, there is room for considerable confusion! Therefore, could I suggest that this topic be clarified in the next update of the documentation?

Hi @Donald,

Just a follow up question on this topic - does the 67% minimum coverage of base year activity apply in my situation?

Thanks in advance!