The SBTi guidance states that listed equity and bonds is defined as
This asset class includes all corporate bonds without known use of proceeds and all listed equity on the balance sheet and/or actively managed by the financial institution.
Therefore, can we confirm, for example are off balance sheets equity or bonds which is actively managed in scope?
Thanks
Hi,
Yes if they are actively managed then they would be in scope.
All the best,
Peter
Hi,
Just to clarify a little bit.
The actively managed definition is a bit too narrow, as we would also include passive strategies for the financial institution which has been involved in designing the strategy (which for instance is the case for most smart beta funds, even if MSCI or S&P is the index provider) or when they control the voting rights, which is true for many passive funds, especially on the retail side. So, actively managed is a bit too narrow.
The basic rule is that if you can in any way influence the companies in the portfolio, through selection/divestment (rules based or otherwise), or engagement, the funds should be in scope for target setting.
Thank you both, this is really helpful!