Partnership for Carbon Accounting Financials (PCAF)

The Partnership for Carbon Accounting Financials (PCAF) is a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments.

The initiative was launched via a Dutch Carbon Pledge calling on the negotiators at the Paris Climate Summit in 2015 to take ambitious steps, starting with measuring and disclosing the GHG emissions of their loans and investments. Following this, additional financial institutions have joined forces to develop and implement open-source methodologies to measure the GHG emissions of all asset classes within their loans and investments portfolios.

Due to the increasing interest of financial institutions worldwide in transparent and harmonized assessment of the GHG emissions of their loans and investments, the global initiative was launched. The globalization of PCAF addresses banks and investors across the world.

As of January 2022, 191 financial institutions have committed to measure and disclose the greenhouse gas emissions associated with their portfolio of loans and investments.

Why it matters

The Global GHG Accounting and Reporting Standard developed by PCAF for the Financial Industry aims to become a global standard

PCAF developed the Global GHG Accounting and Reporting Standard for the Financial Industry, which provides detailed methodological guidance to measure and disclose GHG emissions associated with six asset classes:

• Listed equity and corporate bonds
• Mortgages
• Business loans and unlisted equity
• Motor vehicle loans
• Project finance
• Commercial real estate

Three new draft methods were recently launched for consultation to measure financed emissions from green bonds, sovereign bonds, and loans and investments in emissions removals activities.

Main areas of work related to climate mainstreaming:

PCAF promotes the use of this Standard to measure financed emissions for different purposes:

• Assessing climate-related risks in line with the Task Force on Climate-related Financial Disclosures (TCFD).
• Setting science-based targets (SBTs) using methods developed by the Science Based Targets initiative.
• Reporting to stakeholders like the Carbon Disclosure Project (CDP).
• Informing climate strategies and actions to develop innovative products that support the transition toward a net-zero emissions economy.