Coal companies divestment target

Criteria
1

Hi,

My name is Kassana and I am currently helping one of the major state-owned banks in Thailand. They are interested and considering setting SBT target aligned with SBTi-FI guidance. (Link: Financial-Sector-Science-Based-Targets-Guidance.pdf (sciencebasedtargets.org))

On page 94, under FI-R10 “Phaseout of thermal coal investments”, we understand that this is just the recommendation, and it is optional for FI to set this target; however, the bank strives to set this target as well. Unfortunately, after assessing the possibility of achieving this target, it seems like there will be some remaining lending exposure after 2030 even though we cease investment or lending to coal companies from today onwards.

So, we would like to ask for SBTi clarification if we send the commitment/target to phase out coal later than 2030 (e.g., 2035, 2040), is it possible for SBTi to validate this and can we call this as SBTi target after the validation? If it is not accepted by SBTi, do you have any recommendations on actions for the bank to proceed if the loan has no termination option?

We would be grateful if you could give us clarifications and recommendations on theses and please correct me if I misunderstood anything.

Thank you very much for your time and help.

2

Hi Kassana,

The SBTi published a draft Fossil Fuel Finance Position Paper (FFFPP), and two other documents (including a draft Version 2 of the Near-Term Financial Sector SBT Guidance (NTG)), last month. They are out for public consultation so we welcome your feedback/questions through the survey by Aug 14.

For example, the FFFPP criteria is proposed to be added as a new target method that would only be applicable to FIs that choose to use this approach to set targets under the NTG Version 2, while they will be proposed as general criteria for all FIs under the FI Net-Zero Standard.