In CDP’s latest temperature scoring dataset, the default temperature score has been updated from 3.2C to 3.1C. For companies with base years prior to this year, would they need to update their base year temperature score using the new ITR default score as the 3.2 to 3.1 change result in changes that are not a direct result of investees progress?
Hi @blazzaro
Currently the only ITR method approved for SBTi target setting is the CDP-WWF Temperature Rating method. This method still uses a 3.2C default score. This is the method SBTi uses in its SBTi Finance Tool.
Hi Donald, as of March 2023 the ITR was udpated to 3.1C
This is reflected in the most recent dataset
Yes @blazzaro,
That is CDP data based on their version of the methodology, but that is not the same as the CDP-WWF Temperature Methodology. The latter has not changed its default score.
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Can you explain the difference then in the methodologies? Because CDP states that they are still using the CDP-WWF Methodology to develop scores and markets their data set as compatible to the SBTi. The only difference being the update they made to the default ITR.
As the organization behind the methodology, I would argue their update to their process would constitute an update to the methodology, similar to PCAF, GHG Protocol, or even SBTi stating changes to their guidance. However, you are insinuating their change does not hold water and we should be using the 2.5-year-old guidance that they also developed rather than the most recently available which is based on more recent data and arguably more accurate. Correct?
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SBTi has not developed the CDP or the CDP-WWF ITR methods. SBTi does not have control over how these methods are developed. These methods are developed by the respective organisations and partnerships. SBTi has this far only approved the CDP-WWF ITR method for target setting.
SBTi is developing meta criteria to be able to assess other methodologies, not just ITR. The first version is expected this year. When we have this we can assess and possibly approve other methods for targets setting.
SBTi is also developing an approval scheme for data providers’ ready-made company temperature ratings that uses the CDP-WWF method, to make sure these ratings are indeed following the CDP-WWF method. This should hopefully be out in a not too distant future, enabling FIs to acquire rating data from data providers, rather than calculating them from the ground up, and using these in their submission to SBTi for target validation.
Hi Donald:
Following up on the conversation above.
If we use CDP as a data provider but we keep using 3.2 default score to fill in the TR of the companies that are not within that database, wouldn’t that cause inconsistencies in the Temperature Rating? As CDP is already using 3.1 default score
How is this considered by SBTi?
Many thanks,
Following up on Fernanda and your previous responses Donald, CDP has updated its models to use 3.1 as the default scores and made further updates to the scenario models. Based on the updated draft near-term guidance, we should be using the new 3.1 default score which contradicts your previous responses.
“The types of default scores must remain consistent across sectors. If changes to these models are implemented over the target period, the company will have to re-baseline the temperature of the
fund. This will be based primarily on the sector-specific models that are modified over time.”
Again, the change in default score represents a change in the model not the methodology in calculating scores. They still use the CDP-WWF methodology that is endorsed by SBTi and the dataset sold by CDP is marketed as compliant for SBTi target setting.
CDP temperature ratings - CDP
Can you confirm that based on the current status of the updated guidance that the change to 3.1C for default scores would constitute a recalculation and re-baseline of portfolio figures?
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