Welcome and thank you for taking the time to share your feedback on the Net-zero for Financial Institutions Foundation Paper. The executive summary can be accessed here.

In this paper, the Science Based Targets initiative (SBTi) provides principles, definitions, metrics, and target formulation considerations for financial institutions to set quantitative net-zero targets linked with emissions reductions in the real economy. This paper represents the first step in developing a science-based, net zero standard for FIs and the SBTi plans to build on this paper with a transparent and inclusive multi-stakeholder process.

This public consultation period will be open until December 17, 2021. All individual responses will remain confidential and only aggregate results will be made public. For queries relating to this survey, please contact finance@sciencebasedtargets.org.
Section 1: General 

Question Title

* 1. Please provide your contact information.

Question Title

* 2. What type of organization do you represent?

Question Title

* 3. What is the status of your institution with respect to the Science Based Targets Initiative?

Section 2: Overall Approach

Question Title

* 4. Do you agree with the SBTi approach to net-zero?

Question Title

* 5. Please elaborate on your choice. 

Section 3: Principles

In Section 4 of the foundations paper we propose a set of principles to guide the formulation and assessment of net-zero targets. The goal of these principles is to ensure that these targets lead to a state compatible with achieving a net-zero economy by incentivizing and driving the action needed to meet societal climate goals. There are currently five principles (Completeness, Science-based Ambition, Impact, Decarbonization and Green, and Influence).

Question Title

* 6. How relevant do you find the guiding principles proposed to inform net-zero targets in the corporate sector?

  Extremely relevant Moderately relevant Not relevant
Completeness
Science-based Ambition
Impact
Decarbonization and Green
Influence

Question Title

* 7. Would you like to suggest any rewording to any of the four guiding principles proposed? (Please explain)

Question Title

* 8. Are there additional principles that you think should be considered to inform net-zero target setting in the financial sector?

Section 4: Definitions

Informed by the five guiding principles described in the previous section, the SBTi has identified three formulations for defining net-zero emissions in the financial sector. These approaches mean that reaching net-zero emissions for a FI means achieving a state in which all financing activities result in no net impact on the climate from greenhouse gas emissions. This can be formulated in terms of (1) financed emissions reductions + neutralization, (2) alignment of portfolios with net-zero pathways so that each asset achieves net-zero, and (3) contribution to global net-zero goals by ambitiously reallocating capital to climate solutions. 

Question Title

* 9. The SBTi presents three options to define net-zero (Page 43). Which one do you most agree with?

Question Title

* 10. If you selected “a combination of two or more options” or “other” please elaborate on your choice.

Question Title

* 11. Should different types of definitions apply to different types of financial institutions?

Section 5: Open technical questions

Question Title

* 12. Neutralization of residual emissions

Companies are not able to purchase carbon credits as a replacement for reducing value chain emissions in line with their near and long-term science-based targets - this is often referred to as “offsetting.” However, purchasing high-quality carbon credits in addition to reducing emissions along a science-based trajectory can play a critical role in accelerating the transition to net-zero emissions at the global level. Generally speaking, carbon credits can play two roles in corporate net-zero strategies:

1. Transition to net-zero: purchase credits (not counted towards net-zero claims)
2. At net-zero: neutralize residual emissions, can be achieved with carbon credits

The SBTi takes a precautionary approach on the sequestration and storage of atmospheric carbon and recommends that the use of removals is limited to balancing the impact of residual emissions as per 1.5°C consistent scenarios with no or limited overshoot (for additional information please refer to the SBTi Corporate Net-Zero Standard). As a default position, the SBTi also applied this to FI, where they may purchase carbon credits as additional actions but these should not be used to claim net-zero within their value chains. Please see Table 7 in the draft paper for further details. Do you agree with this approach?

Question Title

* 13. Please expand on your answer.

Question Title

* 14. The SBTi takes a precautionary approach on the sequestration and storage of atmospheric carbon and recommends that the use of removals be limited to balancing residual emissions as per 1.5°C consistent scenarios with no or limited overshoot. Residual emissions at a state of net-zero can be balanced by a few means. Which approach to neutralizing residual financed emissions do you think is most credible for FIs?

Question Title

* 15. Please expand on your answer

Question Title

* 16. The role of climate solutions

Climate solutions cover a broad range of activities that actively contribute to global climate goals and can be broadly defined as green technologies such as renewable energy, sustainable mobility, green infrastructure, and carbon removal activities such as nature-based solutions, direct air capture, and BECCS. Financial institutions play an important role in scaling finance for the development of these solutions. Should science-based net-zero targets explicitly include a target on investing in green solutions?

Question Title

* 17. If you answered Yes to question 16, what is the most credible metric to track the financing of climate solutions?

Question Title

* 18. If you answered Yes to question 16, please share your views on how the ambition of a climate solutions target could be defined?

Question Title

* 19. Fossil fuel financing

Should net-zero targets explicitly address the role of fossil fuel financing?

Question Title

* 20. Do you agree with the proposed ‘disclosure, transition, and phase out’ (of all new fossil investment immediately and existing coal by 2030 and existing oil and gas by 2040) fossil fuel requirements?

Section 6: Closing

Question Title

* 21. Do you have any additional questions, comments, or feedback for the SBTi team?

T