Small Private Debt Provider

SBTi commitments and submissions
1

Hi,

For a small private debt provider, is it possible to just set Scope 1 & 2 targets and if so which route should these be summitted by?

The guidance states “For the time being, private debt is considered optional for private
equity firm” and data quality is currently a challenge.

Would other scope 3 targets (e.g. business travel) be recommended or mandated?

2

Hi, any thoughts on the above would be greatly appreciated!

3

Financial institutions must set scope 1 and 2 and scope 3 category 15 targets based on the Near-Term Financial Sector SBT Guidance and PE Guidance. Scope 3 categories 1-14 targets are also recommended. If an FI is involved solely or mainly in optional asset classes, it should contact the SBTi to discuss a minimum target coverage boundary of these asset class(es) for the portfolio targets to be considered credible.

4

Hi Howard,

We are a small private debt provider (£1bn AUM) and one division within a larger AIM (Cheyne Capital). We have 3 funds, each with a portfolio of 15-20 companies that we have lent to, and some secondary-market bonds.

What guidance do you suggest we follow for target setting? I know the final near-term target guidance for FIs isn’t out yet.

Also, as an LLP and distinct division (called Cheyne Capital - Strategic Value Credit) within the larger Cheyne Capital, there is nothing preventing us from setting our own net zero target… correct?

Any insight hugely appreciated!

Best,
Audra

5

Hi Audra, thanks for reaching out.

Although it is recommended that targets are set at the parent- or group-level, it is currently possible to submit targets at a subsidiary level if the subsidiary is a legal entity. The SBTi currently has a target framework for FI near-term targets while the FI Net-Zero Standard is currently under development. This means that FI near-term targets can be validated according to the V1.1 Guidance while FI net-zero targets cannot be validated yet. As you mentioned, the FI near-term target framework is being updated to V2 in the coming months but V1.1 can still be used for 6 months after the V2 publication for those who are already developing targets under that version.

6

Hi Howard,

Thank you for taking the time to respond. That is incredibly helpful.

Many thanks,
Audra