Legal & Regulatory News

SBTi guidance on overlap between science-based targets and TCFD reporting

On 18 January 2023, the Science Based Target Initiative (SBTi) published a guidance document (the Guidance), which is intended to support financial institutions through the process of committing to and implementing the Taskforce on Climate-related Financial Disclosures (TCFD) and the SBTi financial institution (SBTi-FI) frameworks. The Guidance details the overlaps between these frameworks and further describes the harmonisation inherent in setting credible science-based targets and preparing robust climate-related risk and opportunity disclosures.

The Guidance suggests that by implementing the SBTi-FI guidance to set science-based targets on financed emissions and adopting the TCFD recommendations to identify and disclose climate risks hotspots within portfolios, financial institutions can define credible Paris-aligned climate ambition and enable immediate emissions reductions and long-term climate action, climate-resilient development and financial resilience.

The Guidance provides a step-by-step guide intended for use by financial institutions that have:

1. No existing alignment with either framework.
2. Committed to the SBTi but are not disclosing in line with the TCFD.
3. Disclosed in line with the TCFD but not committed to the SBTi.

Click here to view the Guidance.