I have a question on setting intensity metrics using the Sector Based Decabonization approach for Financial Institutions, based on the document “Financial Sector Science Based Targets Guidance Pilot Version”:
Page 151 (appendix D, the Sector Based Decarbonization Approach for Public Bonds and Equities), under the “Method Output” section, the guideline requires that the target output must be related to an emissions intensity relative to a production activity (i.e. tonnes of CO2 per MWH).
Does this therefore preclude using revenue or invested dollars as the intensity metric (i.e. reduce CO2 emissions in the power sector from bond portfolio by 25% per invested dollar by 2025 from a 2019 base year)?
If so, am I correct to assume that current and future production output of all investee companies would be required in order to use the SDA approach for a public bond or equity portfolio? Or is it possible to use an economic intensity metric for target setting?