Compiling the GHG Inventory

I am reaching out for some guidance around setting SBTs / compiling a GHG inventory for investment companies.

In this case, an investment company invests in specific funds under one asset class (power generation - renewables). However the funds themselves do not have employees and have minimal scope 1 & 2 emissions, the majority of emissions emerge from the scope 3 emissions of the funds (i.e. purchased goods and services).

Is it possible for the investment company to submit their SBT’s “on behalf of” the funds? Therefore changing the lens of the scope – rather than the funds’ Scope 1 & 2 emissions being captured under the investment companies Scope 3 “Investments” emissions, this would rather be captured as the investment companies Scope 1 & 2 emissions. This would then mean that the additional scope 3 emissions that may have otherwise been missed would then be captured with scope 3 target setting.

Under the existing approach, the investment company would be required to use the SDA approach to set targets for their scope 3 “Investment” emissions. The new approach would instead mean that either the SDA approach or a contraction target setting approach could be used for the investment companies scope 3 “investment” emissions (the funds scope 1 & 2 emissions). The more significant scope 3 emissions would then also be captured using a more suitable method than SDA, i.e. through supplier engagement targets.

Please can you confirm if the above approach would be acceptable for the SBTi near-term target setting?

Generally, for investments via funds and collective investment schemes, targets shall be set based on the underlying holdings, i.e., a target would be set on the underlying portfolio companies’ emissions, rather than the funds’.