Portfolio Carbon Initiative

This initiative was previously called the Financed Emissions Initiative.

Available now in FINAL form:
Climate Strategies and Metrics: Exploring Options for Institutional Investors (PDF)

The world is already transitioning to a low-carbon economy. Financial institutions have the power to expedite and smooth the transition by mitigating the carbon impacts of their investments. Throughout 2015 and 2016 the Portfolio Carbon Initiative will develop a series of resources to guide financial institutions towards greater climate performance and away from the risks attached to carbon-intensive assets.

Read the Concept Note for more background on the project and its objectives.

Initiative Goals and Work Streams

While the GHG Protocol Corporate Standard and the Corporate Value Chain (Scope 3) Standard clarify how companies should account for the greenhouse gas emissions that result from their products and services, more guidance is needed for financial institutions if they are to properly assess climate performance from investing and lending activities.

The Portfolio Carbon Initiative has two goals:

  • Provide guidance on how to define, assess, and track climate performance for asset owners and banks
  • Provide guidance on how to identify, assess, and manage “carbon asset risks” for financial institutions

The complexity of the financial sector requires that the Portfolio Carbon Initiative operate via three work streams.

  • Work stream 1: Asset owner climate performance
    This work stream is tailored to asset owners. It will produce two documents: a comparative analysis of current climate performance metrics, followed by climate performance accounting guidance for asset owners.
  • Work stream 2: Bank climate performance
    This work stream is tailored to banks. It will produce a comparative analysis of current climate performance metrics for banks.
  • Work stream 3: Carbon asset risk
    This work stream will produce guidance that explains why and when GHG emissions associated with carbon-intensive assets lead to financial risks, as well as how those risks can be assessed and mitigated.

Publications Timeline

Working Title Description Target Publish Date
Climate Strategies and Metrics: Exploring Options for Institutional Investors The report includes an evaluation of currently available metrics by asset class, provides best-practices based on available data, and recommends the next steps to reach a science-based target setting and accounting framework. November 2015
GHG Protocol Accounting and Disclosure Guidance for Asset Owners Using the results from the preceding report as a key input, guidance on standardized accounting and reporting of climate performance will be developed and delivered using the GHG Protocol inclusive, consensus-based process. December 2016
Climate Strategies and Metrics: Exploring Options for Banks This comparative analysis of climate performance metrics is tailored to the banking sector and their primary asset classes. Fall 2015
Carbon Asset Risk Discussion Framework This guidance will create a practical framework for assessing financial risks associated with carbon-intensive assets, otherwise known as carbon asset risk (CAR). August 2015

Project Partners

Greenhouse Gas Protocol

GHG Protocol is a collaboration of the World Resources Institute and the World Business Council on Sustainable Development. It is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage GHG emissions.

World Resources Institute (WRI)

The World Resources Institute is a global research organization that turns big ideas into action at the nexus of environment, economic opportunity and human well-being. Our 450 experts and staff work with partners in more than 50 countries; we have offices in Brazil, China, Europe, India, Indonesia and the United States.

UNEP Finance Initiative (UNEP FI)

UNEP FI is a unique public-private partnership between the United Nations Environment Programme and more than 200 financial institutions – insurers, investors, lenders – working to better align the operations of financial markets with sustainable development.

2 degrees Investing Initiative (2DII)

2°ii is a think tank working to align the financial sector with 2°C climate goals. It is a non-profit company with 100 members in 12 countries, including financial institutions, governmental organizations, research organizations, NGOs and finance sector professionals.

Related News

Title Source Date

Banks to Receive Guidance on Reporting Emissions in Lending

SocialFunds November 7, 2013

What's the carbon footprint of a bank loan? Sustainable finance groups follow the money

E&E News (paywall) November 1, 2013

Pension funds that ignore climate change are failing to protect savers

The Guardian October 29, 2013

The Coming Carbon Asset Bubble: Fossil-fuel investments are destined to lose their economic value. Investors need to adjust now

Wall Street Journal October 29, 2013

From Financed Emissions to Long-term Investing Metrics: State-of-the-art review of GHG emissions accounting for the Financial Sector

2° Investing Initiative July 2013

Documents

Title Date Size

Concept Note

Spring 2015

Landscape Review of Alternative Climate Metrics

September 2014 265 KB

Advisory Committee Meeting - Summary of Outcomes

May 2014 265 KB

Concept Note - GHG Protocol Financial Sector Guidance

February 2014 450 KB

Terms of Reference for Technical Working Group Memebers

November 2013 150 KB

Summary of Outcomes from Advisory Committee Meeting #1

October 2013 150 KB

Press Release for Financial Sector Guidance

October 2013 150 KB

New York Scoping Workshop Summary

April 2013 300 KB

New York Scoping Workshop Agenda

April 2013 238 KB

New York Scoping Workshop Presentations

April 2013 2.13 MB

London Scoping Workshop Summary

February 2013 258 KB

London Scoping Workshop Agenda

February 2013 538 KB

London Scoping Workshop Presentations

February 2013 1.4 MB

Scoping Survey Results

January 2013 538 KB