The Partnership for Carbon Accounting Financials (PCAF)*, an initiative to align the greenhouse gas accounting rules of the financial industry, was launched globally in September 2019 with about 50 financial institutions, reaching almost 100 members by the end of 2020.
In a Q&A article for Climate Change Business Journal, Giel Linthorst, director in Guidehouse’s Energy, Sustainability, and Infrastructure segment and executive director of PCAF, says that with the addition of HSBC, the partnership has grown to 111 financial institutions, with nearly $28 trillion in assets.
“We’re very pleased with the momentum PCAF has made in terms of commitments,” Linthorst said. “We didn’t expect the fast uptake of PCAF among larger financial institutions, but after the addition of Morgan Stanley to PCAF’s Steering Committee and the commitments of Citi and Bank of America, our momentum accelerated rapidly.”
In the article, Linthorst also discusses factors important to the future success of the initiative. Measuring financed emissions is an annual accounting process connected to financial accounting and reporting. In this sense, financial institutions need to establish and implement a governance and control process to monitor, manage and improve emissions data. Recent innovations lie in the data quality scoring in PCAF’s Global GHG Accounting and Reporting Standard. This data quality scoring enables financial institutions to start measuring and reporting immediately, while improving data quality over time.
Guidehouse's expertise has been instrumental in supporting PCAF.
“Guidehouse was a pioneer in the sustainability, decarbonization, and ESG spaces, and is proud to have developed methodologies for leading sustainability protocols and standards for organizations such as the Science Based Targets initiative (SBTi) and the World Business Council for Sustainable Development (WBCSD), in addition to our work with PCAF,” Linthorst said.
*Guidehouse serves as the organization's secretariat.