Science Based Targets Initiative
Science-based CO₂ reduction targets
What is the Science Based Targets Initiative (SBTi)?
SBTi is committed to the reduction of greenhouse gases and offers companies support on their way to net zero CO₂ emissions. The reduction is based on science-based targets. Through the initiative, companies can align their decarbonization targets with those of the Paris Climate Agreement. In this way, they effectively counteract climate change.
The initiative was created in collaboration between CDP, the UN Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It is also one of the commitments of the We Mean Business Coalition.
Membership objective
Coinciding with its official support of the Task Force on Climate-related Financial Disclosure (TCFD), Commerzbank joined the Science Based Targets Initiative (SBTi) in September 2020.
As a supporter of the TCFD and by joining the SBTi, we are pursuing in particular the goal of making climate risks in the portfolio transparent and comparable. In addition, we continue to set targets to reduce emissions intensities and design reduction pathways in line with the requirements of the Paris Climate Agreement.
How do we manage our Net Zero goals in an SBTi-compliant manner?
Our ambition is to support companies in the real economy in their transformation process and to sustainably reduce the financed emissions in our portfolio. We are pursuing the strategic sustainability goal of reducing the CO₂ emissions of our entire credit and investment portfolio to net zero by 2050. To this end, we have analysed the CO₂ intensities of Commerzbank AG's credit and investment portfolio in 2022. In addition, we have defined sector-specific target values in accordance with the Paris Climate Agreement. In doing so, we methodically adhere to the SBTi.
We have set ourselves concrete sector-specific targets using SBTi's Sectoral Decarbonization Approach (SDA). In this way, we are reducing the CO₂ intensities associated with our credit and investment portfolio and will ultimately achieve our Net Zero Commitment.
We aim to manage all portfolios specified in accordance with the SBTi method, with a particular focus on the emissions-intensive sectors. These sectors are power generation, aviation, automotive manufacturing, commercial real estate financing (commercial and residential use) and the production of cement, iron and steel. We also consider the private real estate financing portfolio, which is optional under SBTi. Sectors not in the scope of the SDA approach are covered by the temperature rating method, which is also acknowledged by the SBTi. In the 2022 reporting year, we formulated corresponding emission intensity reduction targets for these portfolios, which were validated by SBTi. The portfolio targets according to SBTi are published in the ESG framework.
As announced in September 2023, Commerzbank has joined the Partnership for Carbon Accounting Financials (PCAF). In 2023 we therefore adapted our calculation method for portfolio intensities to the internationally recognized PCAF standard. As part of applying this standard, we recalculated the baseline in the starting year of 2021 and determined new target values for 2030. The ambition level of the targets remained the same or was minimally increased, so the cement sector was upgraded from a previous 1.8° pathway to a 1.5° pathway. Final validation of the adjusted targets by the SBTi is still pending.