The first Hallmark of a credible transition plan are Paris aligned targets.
These require greenhouse gas reduction targets in the short-, mid-, and long-term, to be inclusive of scope 1, 2, and 3, and to be aligned with a science-based sector specific pathway which will limit global warming to no more than 1.5°C. These sectoral pathways are developed by organisations including the Transition Pathway initiative, Climate Bonds Initiative, and SBTi.
However, as of November 2022, SLBs with targets designed to address all three emission scopes represented just 14.4% of SLBs captured in the Climate Bonds SLB Data Base (USD29.1bn of the USD201.7bn).
For the avoidance of doubt, any SLB from an agrifood company or oil and gas issuer must include scope 3 emissions. Scope 3 emissions can represent 85-100% of the emissions of such entities. However, just three out of 22 oil and gas SLB deals had included scope 3 targets by November 2022.