Attribution approach application under SDA for real estate loans and investments

[clkj]

Hi there,

we have a question surrounding the attribution approach applied under SDA when calculating the emission intensity of real estate loans and investments.

When following the instructions to calculate the emission intensity for the portfolio and thus applying the attribution approach both in the numerator and denominator they end up cancelling each other out. Hence, our result with be the same, regardless of whether or not we apply the attribution approach…

Could you please give some indication on what the aim would be to apply the attribution approach and maybe share an example of how the emission intensity of a portfolio will differ, when you do/do not apply the attribution approach (the examples in the FI guide do not specify this in more detail…

Kind regards
Clara

[HowardS]

Hi Clara, that is true for a single building. However, based on the example that I made up (screenshot below) - while the FI’s financed emissions intensity for each building is the same as each building’s emissions intensity, the FI’s financed emissions intensity for the portfolio potentially ends up different from the aggregate emissions intensity of all three buildings. In this particular example, the FI’s financed emissions intensity is lower since a larger portion of its portfolio stems from the building with the lowest emissions intensity.