Good Day everyone,
Our Financial Institution has a trading book consisting of market-making trading activities which are linked to our clients’ investments activities, e.g. for hedges on clients positions via barrier reverse convertibles or synthetic forward trading.
Would this activity be considered as “trading securities and commodities” in the table 5.2 of the SBTi Financial Sector Guidance, and therefore out of scope of the target scope?
If not, we struggle to understand what kind of actions we could take on these positions to decrease the temperature rating, given our lack of influence on the positions (the positions are built or sold based on clients’ investments activities so no possibility to influence those bookings, and the positions typically remain during the lifetime of a structured product only, i.e. not enough time to perform meaningful engagement activities).
We’re keen to understand best practices in this regards, so any thoughts or advise from the SBTI experts or from peers from other financial institutions is very welcome.