SDA for Oil & Gas using pathways from TPI


The Transition Pathway Initiative (TPI) have published a 1,5C pathway for oil & gas companies that covers Scope 1, Scope 2 and Scope 3 (category 11: Use of sold products). The intensity is measured in tCO2e / MJ and the pathway is based on IEA’s Net Zero 2050-scenario.

Taking the SBTi’s policy on fossil fuel companies into account, how should oil & gas companies be assessed in a financial portfolio? Can an oil & gas company in an investment portfolio be assessed using SDA with this pathway?

Any thoughts on this topic?


Thank you for your question.

For oil and gas companies, emissions-based, physical intensity targets are the only metrics of accounting currently accepted, however the SDA method is still in development. Therefore, it is expected for FIs to cover the emissions from O&G companies through using portfolio coverage or temperature rating methods in line with SBTi guidance until a sector-specific SDA method is released.