Bank bonds (listed equity and bonds)

Criteria
1

Hi there,

For a bank setting an SBTi, if their balance sheet includes investments into bonds issued by other banks are these a) in scope, and b) if yes, and they look to set at target for these using a portfolio coverage or temperature rating approach, which emissions should be considered? Is it the scope 1 and 2 of the bank, and the financed emissions (scope 3 category 15 of the bank)?

Thank you

2

Yes @VickyH, these bonds are in scope and all scopes should be included.

4

Thanks Donald, and how does this work for the temperature rating approach, as a bank would have multiple scope 3 targets to cover their financed emissions? Is the SBTi finance tool able to accept multiple scope 3 targets?

5

Hi @VickyH,
Currently there are a few FIs with SBTi-approved SBTs and we are working on a solution to combine their multiple S3 targets into one, so that the tool can accept the data. We don’t have an ETA for this right now, but hope to be able to present a solution soon.

6

Hi there,

Continuing this conversation and confirming one assumption: would it be possible to develop 1 single target for private equity and bonds under the SBT Portfolio Coverage?

Thanks,
Ligia

7

Hi Ligia,

That is possible if both private equity and bond investments follow the same criteria (the strictest set, if different) under the same target method.

8

Hi Howard,

thank you for your response. Sossy, I actually meant a listed equity and bonds (mandatory items), can we merge and create one target covering: (i) common stock, (ii) preferred stock, (iii) corporate bonds, (iv) exchange traded funds, (v) investments in real estate investiment (REITs, listed real estate companies, and real estate mutual funds)?

9

Hi Ligia,

The Portfolio Coverage (PC) and Temperature Rating (TR) methods can only be used at an entity level (i.e., not at an asset level). As long as the common stock, preferred stock, corporate bonds, ETFs, and real estate investments are related to entities (e.g., real estate companies and not real estate assets), then one PC or TR target can indeed be set.