The Science Based Targets initiative (SBTi), a target-setting tool, has opened a call for financial institutions to pilot updated near-term criteria and recommendations.

The SBTi published a consultation draft of the document in June for public feedback, which it has incorporated alongside draft criteria from the organisation’s fossil fuel finance position paper.

According to the SBTi, the fossil fuel finance position paper will help financial institutions address their most emissions-intensive investment and lending activities.

SBTi aims to provide financial institutions with a clearly defined path to reduce emissions in line with the Paris Agreement goals. It is voluntary for financial institutions to set science-based targets under the Near-Term Criteria and Recommendations for their sector.

The criteria are only mandatory if/when seeking target validation by the SBTi.

A few Nordic pension companies have taken this path, with Finland’s Varma and Denmark’s AkademikerPension and PensionDanmark last month announcing they had received the seal of approval from SBTi.

SBTi said financial institutions have until 14 December to submit their interest in taking part in the new pilot.

SBTi is a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).

It published its first framework for financial institution target-setting in October 2020. It is updating its 2020 near-term framework and introducing a new financial institution net-zero standard to “further expand climate action among financial institutions and address recent developments in climate accounting and net-zero platforms”.

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