What validation route should we use?

Summary

Hello,

We have been in contact with SBTi through the info mail, who directed us to this Financial Institution forum to help us in the process of helping our client commit to set science-based targets. We tried to contact you through your financial info mail but haven’t received any answer, so I’ll post the question here as well.

We have a client who would like to set science-based targets (1.5°C-aligned), and we are into running the non-financial institution route but want to make sure this is the right way forward so that we don’t get stopped in the validation process. Here are some information that hopefully will help you provide us an answer.

Our client is a Nordic asset manager in real estate and the company’s business model is to develop and manage real estate companies together with selected capital partners such as pension funds, insurance companies or other large international asset managers. Now, they would like to set science-based targets for one of the real estate companies they manage, which is a company that owns and develops commercial real estate in Sweden. The real estate company has zero employees since a lot of functions are outsourced and/or managed by the employees at the Nordic asset manager (who owns a small stake in the real estate company). The other owner, who owns the majority of the company, is one of 6 Swedish National Pension Funds.

About the pension fund
A pension fund is tasked with helping protect the Swedish public pension system for current and future pensioners through responsible investment and management of the pension buffer. The Fund’s operations are almost entirely prescribed by statute and the government has waived its regulatory oversight.

When we went through the SBTi Standard Commitment Application, we found out that we have to answer a question about the owner of the real estate company. We would say that the most suitable option is state/private owned, but that without having SBTi’s definition of a “state-owned enterprise”. With that said, we are even though into running as privately owned because we interpret that state owned company is fully owned and controlled by a state or authority, which is not the case for our customer. A public pension fund is the majority owner in this case, but in Sweden the public pension funds are governed by their own law which gives them independence from the government.

With all this in mind, is it OK for us to continue the process as private owned and the non-financial institution route? It is important that we sort this out by now, before entering the commitment process.

Many thanks!