We’re a fast growing, small FI. We’d like to set a SBT and I understand that we must include category 15 emissions in the SBT. We’d also like to set a separate scope 3 target related to other scope 3 categories. We would like the other scope 3 target to be intensity based on a $ revenue basis. Can we use that as the basis for an intensity target, or should we set an economic intensity target based on GEVA?
For financial institutions interested in submitting targets on categories 1–14, they must ensure that
these targets meet criteria 19–20.2 in the latest SBTi corporate criteria for them to be approved and
announced. Intensity targets based on revenue are acceptable for scope 3, and you can find more information on our scope 3 target setting methods in Section “Available scope 3 target-setting methods” in the SBTi corporate manual.
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Hi @ChendanY, looping back to this question. It is clear that a FI must set an emissions target around scope 3 category 15 emissions. However, if a FI’s scope 3 category 1 emissions are >67% of total emissions (as well as >67% of just scope 3 emissions), does a FI also HAVE TO set a target around scope 3 category 1 emissions, or is that just a recommendation?
Hello kfoley
I think that to answer your question we need to take a step back to analyze the main activities of the company you are referring to.
The SBTi defines financial institutions as companies whose business involves the dealing of financial and monetary transactions, including deposits, loans, investments, and currency exchange. If 5 percent or more of a company’s revenue comes from activities such as those described above, they are considered to be financial institutions. Otherwise they need to submit their targets via the corporate route.
It may be the case that >67% of total emissions correspond to cat 1: purchased goods and services because other type of activities are more relevant to their business than the Financial activities covered by category 15: investments.
In the case that more than 5 percent of the revenue comes from financial activities, FIs are only required to measure and set targets for their scope 1 and 2 and scope 3 category 15: investments.
Setting targets on categories 1-14 is optional under the current FI Guidance, as such, it is recommended but not required for FIs to measure and submit a full inventory for categories 1 to 14 at this point.
However, FIs wishing to increase their ambition setting scope 3 cat 1-14 targets must submit a complete inventory following the minimum boundary for each category in conformance with the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Optional targets on these categories must meet the scope 3 criteria in the latest SBTi criteria for companies (e.g., including 6, 13-14, 18-20) to be approved by the SBTi.
The caveat here is that, as these targets are optional, we recommend but not require that FIs cover 67% of emissions from categories 1-14 with targets. This criteria might change becoming more stringent in future updates.
I hope this helps to clear your question.
Monica
Hi! I was wondering, with the new draft Net Zero guidance, is the expectation that, for a long term target, that FIs do eventually need to include Cat 1-14? Or will it still be optional in the long term?
thanks
Hi nv1234,
Thank you for your message, actually this is one of the consultation questions for the Financial Institutions Net Zero standard. Please participate in the consultation so that your stance can be considered. The consultation will be open until August 14, 2023. You can read the drafts documents and access the survey here.
Best regards,
Monica