SDA - 1.5°C trajectory - Excel Tool - Lack of coverage - ETFs

Dear all, I have some questions concerning the application of the the SDA.

  1. At page 59 of the Financial sector Science-based targets guidance, it is stipulated that “SDA uses the B2DS scenario from the ETP 2017, which comprises emissions and activity projections used to compute sectoral pathways aligned with limiting warming to well-below 2°C (IEA 2017). The SBTi also provides a 1.5°C-aligned pathway for the power sector that enables electric utilities to submit 1.5°C-aligned targets for official recognition”. Does that mean that if we want to follow a 1.5°C pathway on our investment portfolio, we won’t be able to do so by following the SDA ?

  2. I have some difficulties understanding the Excel tool. Let’s take the example of the the listed equity we understand the computations of the financed emissions :

    From there, we have the emission intensity in the base year for a sector. But then, we are supposed to use the Excel tool. A) What is the sheet we need to use “Target Setting Tool (sheet “Scope3 Tool”)” or “SBT Tool”. B) In both files the emission intensity previously computed is not needed in the Tool so we don’t really get how to set a target then.

  3. When we are in the case where one method doesn’t enable us to cover the required coverage, we don’t understand how we are supposed to use another method to achieve the coverage. For instance, if we don’t reach the coverage of 100% of corporate bonds in one sector with the SDA and we decide to compensate with the TRA, how does it work? Since one is in temperature score and the other is an emission reduction per sector.

  4. Concerning the ETF asset class, how should we consider it since there is no methodology in the PCAF document of 2022 p 46 ? “The Financed Emissions Standard does not provide explicit guidance on methods to calculate financed emissions for every financial product including the following: private equity that refers to investment funds, green bonds, loans for securitization, exchange traded funds, derivatives (e.g., futures, options, swaps), initial public offering (IPO) underwriting, and more. More detailed guidance on such financial products will be considered and potentially published in later editions of the Financed Emissions Standard.”

Best regards,