Please can you further clarify which off balance sheet assets are required to set targets on for SBTI. This is still not clear to me in the answers provided to date

Criteria
1

Above (per Guidance) it is noted that an FI needs to include funds managed under discretionary mandates.

However, in the Guidance, the SBTi also “recommends but does not require that banks’ asset management divisions follow Table 5.2 to set targets on these funds. If banks decide to exclude their asset management divisions from their parent company–level targets, they should disclose this exclusion in the target wording for transparency and comparability.”

We have a client asset management division that’s a separate subsidiary to our bank.

Is our interpretation below correct?

  • Setting targets for managed off-balance-sheet client assets (discretionary mandates) through our subsidiary is OPTIONAL as long as we disclose this exclusion.
  • Setting targets on funds we manage and own (on balance sheet) is REQUIRED, BUT ONLY where approaches exist - e.g. listed equity and corporate bonds? (For the time being, Derivatives, Sovereign and Govt bonds, Sub-sovereign municipal bonds, Agency bonds, Securitized fixed income (ABS, MBS) are not required.)

Thanks.

2

Thanks for your questions.

  • Correct

  • Please refer to Table 5.2 in the Financial sector guidance for information on required asset classes and the applicable methods . For banks(without their asset management divisions), consumer loan, project finance, corporate loan, and listed equity and bonds are the most relevant asset classes.

3

@SBTifinance In Tab 5.2 Consumer Loan are either optional or excluded. Could you please clarify your statement that " For banks(without their asset management divisions), consumer loan, project finance, corporate loan, and listed equity and bonds are the most relevant asset classes."
Thank you

4

Consumer loans can be relevant for banks, but they are not required or in scope of the framework. For instance, a bank might issue mortgage loans(relevant) but it’s not obligated to set targets on them under the current framework.