Baseline Portfolio Coverage with low data availability

Methods
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Hi,

I am wondering about how to set Portfolio Coverage targets when the data availability of underlying assets is low? Since the PCA method requires the baseline PC to be able to calculate the linear path to 100 % PC in 2040 the data for the underlying assets in the base year is required to be able to submit a SBT to SBTi?

For example it can be difficult to assess PC with corporate loans compared to listed equity/bonds where this data is available from the Bloomberg terminal. This goes against SBTi’s general recommendations that FI should set SBT’s as soon as possible to then improve data availability over time, for example mentioned in training modules and also in forum posts such as of the linked from Donald at SBTi below.
Answer from Donald, May 2022

Does this mean that it is feasible to assume that all underlying assets where there aren’t available data regarding SBT’s doesn’t have SBT’s?

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You will indeed need to know the baseline PC to calculate the minimum target ambition that is required. You would just need to know the companies you are lending to/investing in and then can check the SBTi Target Dashboard to see if they have validated SBTs.

1 Like
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Hi,
Yes, that is a good assumption. A good source for the data is the target dashboard that Howard links to, but this data is also available at other data services.
And just to be clear, as portfolio coverage is a binary method, by that definition we always have data on all companies. Either the company has a target validated by the SBTi or it does not have a validated target. Therefore you can always use portfolio coverage to set a target, even if your baseline is 0%, i.e. you currently have no companies in your portfolio that have set an SBTi validated target.