PCAF understands that financial institutions manage diverse portfolios consisting of many types of financial instruments including loans, investments, insurance products and others. Calculating GHG emissions of these portfolios is complex. The updated PCAF Standard add several new methods to cover more financial instruments and address the diversity in financial portfolios. PCAF’s existing methodologies have not been changed. The new methods close gaps, enabling institutions to account for emissions across relevant exposures.
The updates to the PCAF Standard were developed by industry-led working groups consisting of over 100 experts, made up of representatives from PCAF signatories with global representation. The standard development process was led by PCAF’s Core Team, the signatory group responsible for governing the Standard.
“This update reflects the collective expertise and commitment by our global community of signatories,” said Hetal Patel, Head of Sustainable Investment Research, Phoenix Group and PCAF’s Core Team Chair. “By enhancing the Standard with new methods and guidance, we’re helping financial institutions create a more comprehensive and complete view of the emissions impact of their activities and exposure to associated risks.”
This update expands the scope of the PCAF Standard by introducing innovative methods that enable financial institutions to measure and disclose emissions linked to their portfolios. These updates reflect growing demands from financial institutions.
“Complete, transparent, and consistent accounting methods are the foundation of credible financial GHG emission disclosures,” said Caspar Noach, PCAF’s Technical Director. “This update to the Standard reflects our commitment to helping financial institutions and their stakeholders improve transparency and make better-informed decisions.”
The update includes new methods and clearer guidance, making it easier to track emissions across more financial product types. More specifically, the updated Standard includes:
While these methods are available for use today, PCAF recognizes that financial institutions need time to integrate them into their systems and disclosures. Institutions may set a feasible timeline, provided that they transparently disclose the share of their current portfolio included and excluded, along with clear justifications for any exclusions.
PCAF’s continuous development of new methodologies to broaden the scope of GHG accounting reflects its commitment to meeting industry demand. As the global standard-setter for GHG accounting of Scope 3 Category 15 emissions, PCAF provides financial institutions with a platform to collaborate and improve GHG methodologies for the industry, forming a community focused on shared knowledge and action.
The updated PCAF Standard significantly expands the ability of financial institutions to measure and report emissions related to financial activities.
About the Partnership for Carbon Accounting Financials (PCAF): The Partnership for Carbon Accounting Financials is an industry-led initiative. Created in 2015 by Dutch financial institutions, PCAF extended to North America in 2018 and scaled globally in 2019. Committed to the measurement and disclosure of the absolute GHG emissions of their portfolios, this industry-led initiative has rapidly expanded in North America, Latin America, Europe, Africa, and Asia Pacific, with more than 680+ financial institutions participating in PCAF. Established to promote a harmonized approach to accounting and disclosure, PCAF provides standardized methodologies that help financial institutions assess the GHG emissions associated with their portfolio of loans, investments, (re)insurance underwriting, and other financial products and services. Financial institutions collaborate to improve GHG methodologies for the industry, forming a community focused on shared knowledge and action.
