SBTi methods for a tech-forward financial services company

Hi there,

We have reviewed the SBTi Criteria and Guidance for FIs. It is our best understanding that our company’s activities (see description below) fall under “Optional Activities” as defined by the FI SBTi Guidance. We have completed a GHG inventory and category 15 emissions are <1% of total scope 3 emissions. While emissions are minimal and considered optional, we are committed to science-based climate action and thus would like to explore setting a target on these emissions.

Company Description:

  • We are a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions. We offer credit cards (e.g. private label, co-brand, and direct-to-consumer), buy now, pay later products (e.g. installment loans, split-pay), and saving solutions (e.g. high-yield savings, certificate of deposit) for our customers.

  • As such, we only offers unsecured lending where customers have the choice and freedom to use the credit how they see fit, as long as the purchasing vehicle is accepted. We do not provide conventional loans (mortgages, auto, business, etc.) or engage in investment banking.

  • Further, we generally do not invest excess capital into other business industries. The vast majority of excess capital is either used to fund new loans, invested in US treasuries / cash equivalents, or held as liquidity.

Could you please kindly assist in answering the following questions:

  • Based on our company description, could you please confirm that our business activities are considered “Optional Activities”?

  • Could you please advise on the best methods for setting SBTs?

Many thanks!

1 Like

I don’t have an answer to this but would also like to know where your company fits in the SBTi framework as I have a client who offers similar types of financing - covering invoices and some specific loans to unlisted companies for purchases of machinery and the like.

Thanks for posting the question!

Please refer to this thread for a related question. Please note that there is a difference between loans to individuals (mortgages are currently optional while other consumer loans are out of scope) and loans to companies (which are required or optional - see Table 1 of the pilot test version 2.0 of the Near-Term Criteria and Recommendations for FIs for additional details). If a company is not required to cover its financial activities, then it could potentially set targets as a (non-FI) corporate.