Am curious on applicable methods applicable for FI in relation to Ag sector. How are they required to cover up to 67% of FLAG- related scope 3 emission if there lending activities is all tied to FLAG. What’s the best methodology to align to SBTs
Thank you for your question.
With regards to corporate loan targets, there are 3 methods applicable - the SDA, SBT Portfolio Coverage and Temperature Rating. The SDA would require data to be able to use the applicable commodity pathways to set a physical intensity target, I would also advise you to refer to the SBTi Corporate Guidance and SBTi FLAG guidance in setting an SDA. Alternatively, the engagement targets (i.e. Portfolio Coverage and Temperature Rating) are available if the FI is facing data constraints for the FLAG metrics and if the FI has FLAG activities outside the available commodity pathways. The Portfolio Coverage target would require engaging with corporates to set science-based targets, and the Temperature Rating target would require targets to align with ambition of the Paris Agreement. I hope this helps in explaining the applicable methods for corporate lending.
Thanks Haseena for the reply, really helpful.