Determining boundary of investments to include in SBT

Hello SBTi community,

  1. If a portion of the investments fall under Bonds of Bonds – which is optional to set an SBT against (as per Table 5.2), can the FI decide not to set an SBT for this portion of their investments?
  2. Can an FI submit SBTs for their institution and have those certified by SBTi before setting an SBT for their investments?? Or must they do it all at once?

Hi Mike, please see answers below

  1. Correct, as these are optional they do not have to be covered by targets
  2. no, FIs must submit both operational (S1+2) and scope 3 investment targets at the same time

Hello @Eoin if you can please review the below and provide a final determination of whether my client is classified as an FI that would be most appreciated as we seem to be going in circles.

As at February 2022, nib Group (nib) are committed to the SBTi Net Zero Standard. We are now developing our Science-Based Targets (SBTs). We write to you to clarify the SBTi’s definition of ‘Financial Institution’ and the application of the Sector-Specific Guidance. Specifically:
• Given that our investment income is relatively small (approx. 2 per cent of total revenue) and our investment management function is outsourced, do we need to use the ‘Financial Institution’ guidance for SBTs and Net Zero?
• Secondly, if nib does qualify as a ‘Financial Institution’ in accordance with the guidelines, can we exclude investments that fall into the category of ‘funds of funds’?

We have included information about nib that we believe is relevant to this decision and ask that you don’t share this beyond SBTi:
• nib provides health and medical insurance to Australian and New Zealand residents, and international students and workers in Australia. We are also a global distributor of travel insurance. nib foundation is an independent charitable trust that grants funding to charities.
• We do not arrange or execute deposits, loans or currency exchange.
• All (100 per cent) of our asset management is outsourced to Mercer (Australia), Nikko AM (New Zealand) and Macquarie (nib foundation).
• Through our asset managers we invest in cash, fixed income, shares and property (see below breakdown as at 30 June 2021).

• As at 30 June 2021, our total revenue was AUD$2.6 billion and our net investment income was AUD$51.8 million. Our net investment income represents 2 per cent of our total revenue (see below).

• The management of approx. 80 per cent of nib’s investment assets is outsourced to Mercer under an implemented investment consulting agreement. nib investments in, and own units in, Mercer’s unit trusts, the funds of which are managed by multiple fund managers under the control and discretion of Mercer. nib has no interaction or relationship with these underlying fund managers. Mercer is essentially a manager of managers.
• nib’s New Zealand investment assets are managed and directly invested by Nikko AM into a portfolio specifically holding only nib assets. This portfolio of assets are invested in the name of nib.
• nib’s foundation investment assets are managed by Macquarie who manage the managers who ultimately invest the funds. nib foundation invests directly into the underlying funds, the administration and execution to affect this is all managed by Macquarie. nib has no interaction or relationship with these underlying fund managers.
• Together with Mercer, Nikko AM and Macquarie, nib reviews and determines its asset allocation annually. We commission the, to advise and implement investment decisions on behalf of nib. This means our asset allocation could change as frequently as annually which further impacts our ability to influence the fund managers managed by Mercer, Nikko AM and Macquarie

We would appreciate your guidance on the above so we can finalise the development of our SBTs and accompanying roadmap to net zero. If you’d like to discuss this further, please contact me at or +61 402 376 835.

Kind regards