Is the business that I represent a Financial Institution in the SBTi-definition?

SBTi commitments and submissions
1

I represent an Asset Manager, managing funds investing in real estate and where we as asset manager are responsible for managing the funds, investing in real estate and managing and developing the real estate portfolios. Are we a Financial Institution according to the SBTi definition and should for the Financial Institution route or are we considered an ordinary company and should go for the corporate company route? And if so, as we are less than 500 employees can we go for the SME route?

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2

Thank you for your question and your patience as we follow up.

The SBTi defines financial institutions as companies whose business involves the dealing of financial and monetary transactions, including deposits, loans, investments, and currency exchange. If more than 5% of revenue comes from these activities then you must use the FI framework.

Hence it depends if you would consider the business a pure Asset Manager or an equity based REIT.
For REITs we typically divide all mortgage based REITs as FIs and all equity based REITs as regular companies. Hence the majority of REITs currently use the regular framework for target setting. If you would classify yourself as an Equity based REIT, then you could use the regular company framework (and the SME route if under 500 employees).

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3

Following up on this question, I do wonder how to treat FinTechs? Should these follow the SBTi FI route or the standard corporate target setting route? Thanks for your help!

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If these companies are not directly involved in investment/lending activities then they can use the standard company route. Many other financial sector firms e.g. master card, use the standard company route

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5

Hi Eoin, thanks for coming back to this! In such a case, do I understand your previous answer right, that FinTechs would also be able to use the SMEs rote if they are not directly involved in investment/lending activities?

6

Hi, yes if a fintech company is not directly involved in investmentment/lending AND they are an SME then they could use the SME route.

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7

Hi team,

I’m using this topic because I have the same question: Is the business that I represent a Financial Institution in the SBTi-definition?

The company I represent is market leader in Europe for premium services covering all aspects of on-the-road supply and mobility for truck and car fleets.
Main products / services are:

  • Non-cash payment services for fuels (gasoline, Diesel, gas, power charge)
  • Fuel trader
  • Toll solutions (toll boxes combined with a software solution for automatic toll processing)

We wonder if we should classify the company in the sector “software and services” /due to commercial electronic data processing), “trading company” (due to traded fuels) or “consumer finance” (due to travel-related money services) ? And in the last case, should the company follow the FI route?

Thanks for your answer!

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Hi there, based on the activities you would not be classified as a financial institution so you should set your targets via the regular corporate framework.

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