Hi, I’m Hyerin from South Korea.
I always appreciated your hard works to make our world better!
I have several questions to be answered from you
The required minimum coverage of some of the products (e.g. common stock, preferred stock, corporate bonds, electricity generation project finance, electricity generation corporate loan) is 100%.
In practice, for some companies, some of the loans and finance cannot be included due to lack of their emissions data, physical activity data, etc.. Do you have any de minimis threshold or definition of exceptions?
If the coverage does not meet 100%, is it impossible to get validation of the SBT targets, or is there any other way to get validation? (The following question would be helpful for you to understand this question: if there are companies that their greenhouse gas emissions cannot be mesured, is it possible to exclude those companies from the coverage?)
Thank you very much.
Best regards, Hyerin
You can always include 100% of assets when using the portfolio coverage (PC) or temperature rating (TR) methods, regardless of data availability. It is built into the design of the methods.
PC is binary. Either the company has an SBTi-approved target or not. You don’t need any other data than this for PC. This data point is available from several data providers and also for free in the SBTi CTA (companies taking action) table.
TR is using a default score, if any company lacks any of the required data inputs for the TR calculation. Hence the company will either get a score calculated based on the data inputs or be given a default TR. Thus 100% of assets can be scored. See the CDP-WWF Temperature Rating method for further information.
As you can use these methods for equities, corporate bonds and corporate loans and you can combine these methods with SDA, you can always achieve 100% coverage for these asset classes, using TR or PC or a combination of TR and/or PC and SDA.