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.