By Kathryn Rock, Angélica Afanador
The Partnership for Carbon Accounting Financials (PCAF) is the first global initiative ever created by the sector that enables financial institutions to measure and disclose the greenhouse gas (GHG) emissions associated with loans, investments, insurance liabilities, and other financial products and services.
Guidehouse supports the global initiative PCAF to standardize GHG emissions accounting for financial institutions.
Given the scale of the climate challenge and the crucial role of the financial sector in facilitating the net zero emissions transition, a group of banks, investors, and insurance companies from five continents partnered to create the Partnership for Carbon Accounting Financials (PCAF)1 . Committed to measuring and disclosing the GHG emissions of their portfolios (Scope 3 category 15), this group has expanded rapidly in North America, Latin America, Europe, Africa, and Asia-Pacific.
Governed by practitioners from ABN AMRO, Amalgamated Bank, the Global Alliance for Banking on Values, Morgan Stanley, NMB Bank, and Nordea, PCAF aims to advance GHG emissions accounting in the financial industry, by developing GHG accounting standards and increasing the number of financial institutions adopting them globally.
The PCAF Board engaged Guidehouse to serve as the Secretariat of PCAF, facilitate the development of the PCAF Standards, and provide technical support to PCAF signatories worldwide on measuring emissions associated with their financial products and activities. Guidehouse provides:
As of mid-2023, PCAF has grown to more than 400 signatories2 representing a diversity of financial institution types and geographies. These signatories have committed to measure and disclose their climate impact using the PCAF Standards. It is expected that this trend and steady growth will ultimately make GHG accounting a common practice within the financial sector globally.
As of mid-2023, the Task Force on Climate-related Financial Disclosures (TCFD) and the U.S. Securities and Exchange Commission (SEC) both reference the PCAF Standards. In addition, PCAF enables financial institutions to comply with the International Sustainability Standards Board (ISSB) Standards, which require the measurement of Scope 3 Category 15 emissions.
TCFD officially recommends PCAF for measuring and disclosing financed emissions, SEC explicitly recommends to use PCAF as one of the three international reporting standards, PCAF enables financial institutions to comply with ISSB, Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD) by providing a standardized methodology to measure financed emissions.
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