Considering the updates to the Near-Term Framework and the development of the Financial Institutions Net-Zero Standard, the SBTi is allowing financial institutions that have publicly committed to setting an SBT to extend their submission deadline until six months after the publication of the FINZ Standard V1 (expected in Q4 2023).
If a financial institution opts for this extension, are they required to remodel their SBTs considering the updated guidance or are they able to continue using the existing v1.1 guidance (which will remain valid for 60 days after the publication of the v2 draft)?
Thanks for the question Tom. An FI would be required to model their SBTs based on the version of the standard/guidance at the date of the submission. As you mentioned, the version 1.1 of the guidance will remain valid for 60 days after the publication of the v2 guidance, after which validation against version 2 would be required, if not submitting a net-zero target.
Thank you for your answer, Hunter. For the following example, can you please clarify which guidance a financial institution (FI) should use to model their SBTs?
The FI’s existing submission deadline is the 31st July 2023, therefore they have modelled their SBTs using V1.1 of the NT guidance. By requesting the 6-month extension from the publication date of the NT V2 draft (assumed to be end of June 2023), this would push their submission deadline to end of Dec 2023.
If the FI wishes to continue using the V1.1 guidance, can they still request the extension? This would give them one additional month to submit their target as the V1.1 guidance remains applicable for 60 days after the V2 draft is published (i.e., it is applicable until the end of August).
Your assumptions are correct, as long as an FI submits an extenstion request by the deadline and subsequently submits their targets before the V2 guidance comes into effect(60 days after release), their targets would be validated against the V1.1 guidance. After that, the V2 guidance would be the only available guidance that targets would be validated against, aside from the upcoming Net-Zero Standard and future iterations of the guidance.
An FI has the flexibility to request the extension regardless of what guidance they eventually submit their target for validation against as long as they have committed to set an SBT.