Integration of sovereign bonds in the methodology

Good evening SBT-FI Team,

We are currently working at EcoAct on ongoing SBT-FI Trajectories, and have 3 enquiries:

  1. First, our clients own a fair amount of Sovereign Bonds and we wanted to know to what extent and time frame this asset class will be integrated to the framework.

  2. Secondly, we our encountering a specific case figure of Covered Bonds which are linked to an empty jurisdictional structure. It would be false to trace the identifier to the parent company. Is this asset class excluded or is there a way around?

  3. Finally, the coverage of SDA Tools and Method do not fully match client needs :

  • 1,5°C pathways are not always available
  • Transition scenarios might be considered outdated and only fixed at global level (no geographic contexts)
  • Limited sector coverage

In order to bridge these gaps, we’d like to partner with two scenario providers, Enerdata and Solagro , in order to set specific sectoral SDA targets based on :

  • Adapted SDA methodology with updated global Energy & Climate transition scenarios (ie. Enerdata’s EnerFuture)
  • These scenarios are updated at least once a year with a detailed geographical granularity (50+ countries individually detailed with a regional and local approach) and sectoral granularity (10+ sectors). EnerFuture scenarios are developed with POLES model with transparent assumptions and methodology. EnerFuture & POLES have strong references from both public and private sectors and are backed with strong academic references as well (a French and a European Commission research center develop POLES model)
  • We believe that using a range of scenarios/model from different providers (IEA, IPCC, Research Center, Enerdata…) could strengthen SDA methodology and could reduce the possibility of bias associated with using an unique source of data

Would that process be acceptable, provided we’re fully transparent on the data we use ? Would it be possible to set and validate SBTi targets by following this approach ?

Happy to discuss this matter should you have any further question or remark.

Thank you for your inputs!

Best regards,