Applying science-based targets to finance firms

Asset managers calling for companies to set science-based targets are having their time in the sun

Since it launched in 2015, the Science Based Targets initiative (SBTi) has been a guiding light for companies looking to reduce their emissions in a way that is aligned with climate science.

The SBTi is a partnership between the Carbon Disclosure Project, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature, which has brought together a team of experts to independently assess and validate emissions reductions and net-zero targets.

Asset managers have been quick to call on companies to adopt these targets to help with their own analysis and investment decisions because, as Georgina Tayler, research analyst at MainStreet Partners, says: “If fund managers are better able to identify the companies with robust greenhouse gas reduction objectives, then their claims of green know-how will be more legitimate.”

But now attention is turning to the asset managers themselves, meaning fund selectors may be able to apply the same scrutiny to firms’ climate goals as asset managers have to companies.

This year, the SBTi tells ESG Clarity, the initiative will be updating the industry on the launch of a Net-Zero Standard for Financial Institutions, helping these firms and other financial institutions set their own science-based targets.

Read the full feature in ESG Clarity’s February 2023 digital magazine.


Natasha Turner

Natasha is global editor at ESG Clarity, part of Mark Allen Financial, and has been a financial journalist for seven years. She has been shortlisted for Story of the Year and Investment Journalist of the...