Requirements to account for client's Scope 3 through the SDA

Hi there,

My general understanding from the FIs guidance is that corporate loans should cover Scope 1 and 2. However, you are also mentioning the power sector guidance which covers Scope 3 categories 3 and 11.

  • Are banks required to cover Scope 3 (where relevant) for their power clients?
  • If yes, then are 3 separate financed emissions targets expected for Power? i.e. one target for Scope 1 + 2; one for Scope 3 cat 11; and one for Scope 3 cat 3 (or even a combined target for Scope 1, 2, and Scope 3-cat 3)?

Same question for all sectors where Scope 3 is mandatory per the sector specific guidance (e.g. OEMs). For corporate loans, when are FIs required to include client’s Scope 3 emissions in their financed emissions accounting using the SDA?

Many thanks!

Hi Ana,
Thanks for your questions.

  1. It is best practice that banks also cover any power generation activities that is typically reported as part of scope 3 (purchased and resold electricity), as this is now the criteria used to assess power companies who submit their targets to the SBTi to be validated
  2. We expect a combined target, as this is easiest to communicate.

The only other sector where this applies would be for OEMs, and any SDA targets on this sector would have to include scope 3 emissions for use phase.


Page 145 of the SBTi FI guidance says that “FIs shall refer to relevant SBTi sector-specific guidance for inclusion of portfolio companies’ scope 3 emissions in targets”.

The Power guidance says that “If a company’s relevant and mandatory scope 3 emissions are 40%
or more of total scope 1, 2, and 3 emissions, a scope 3 target is required”.

However, Table 1 on p.12 of the Power guidance mentions that Scope 3 category 3 related to electricity that is purchased and sold is N/A under “Applicability to organizational boundary SDA target” and that it is required under “Applicability to all sold electricity SDA target”.

*To cover the all sold electricity SDA target, the FI would need to engage with its investees as the current lack of disclosure makes it challenging to have data for the MWh electricity purchased. How to calculate “MWh of electricity purchased” if investees are not reporting such details in their annual reports?

Therefore, can the following rationale be applied?
Since according to the power guidance, including scope 3 category 3 under the organizational boundary is not applicable, the FI doesn’t necessarily need to include scope 3 targets regardless of whether these emissions represent more than 40% of the investee’s emissions.

Many thanks!

Hi ACrosswell, thanks for the question.
The power guidance you are referring is used to power companies when they are setting their own SBTs, and they should include puchased and resold electricity when that is relevant. Ultimately these are emissions that the power gen companies should take responsibility for, and FIs should try to include these when they have sufficient data.
Therefore, if power gen companies publish intensity values and targets covering all sold electricity, FIs should use those as a priority, and then just use scope 1+2 for the remaining companies where it is not clear whether scope 3 is captured in their targets.

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