2° Investing Initiative has been involved in a number of these initiatives, often as a technical partner or data provider.
We think it is time to take stock of where we are, what we have learned, and to consider what science-based target-setting process for financial institutions should or could look like.
This note represents – for us – the summary of a conversation we started roughly two years ago, bringing together our learning from our real-world application of our models with NGOs, supervisors, banks, governments, and investors; as well as countless interviews and workshops, where we have tried to get a better understanding of what the way forward is for target-setting. In that sense, it synthesizes all of these conversations. In doing so, it seeks to clarify our technical perspective on the topic, while opening up the conversation to a broader market. We want to hear from you. What do you think about target-setting? Where should the journey go? What is your take on the important issue of “portfolio leakage” and can we address this?
We don’t want this note to close a chapter of a research journey, but rather start a broader chapter for the sustainable finance industry and ecosystem as to what science-based target-setting contributing to real world impacts need to look like.