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Press Release  |   03.18.2021  |   maxine.chikumbo@wri.org

New Standard Developed to Help Financial Industry Measure and Report Emissions

WASHINGTON, D.C. (March 18, 2021) – A new standard to help the financial industry measure and report financed greenhouse gas (GHG) emissions was launched at the end of 2020. The Global GHG Accounting and Reporting Standard for the Financial Industry was developed by the Partnership for Carbon Accounting Financials (PCAF) as a response to industry demand for a global, standardized approach to measure and report finance emissions.   

Written by a diverse, global team of financial institutions for financial institutions, the Standard combines deep industry insight with the rigor of the Greenhouse (GHG) Protocol, the supplier of the world's most widely used greenhouse gas accounting standards. The Standard bears the “Built on GHG Protocol” mark, an achievement earned after an in-depth review by WRI for strict adherence to the GHGP’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard.  

The “Built on GHG Protocol” mark provides assurance and credibility of the GHG accounting methods in the Standard, giving it the visibility and recognition as the definitive global standard for GHG accounting for financials. The Standard’s much-needed universal, standardized, transparent methodology will go on to support the further growth of GHG accounting in FIs across the globe. 

“Achieving the GHG Protocol Built on Mark recognizes the robustness and credibility of the PCAF standard for measuring financed emissions. Financial institutions can now rest assured that they will be using a leading global standard for GHG accounting of financial assets, a step that can contribute to further their climate-related business goals.”  

– Giel Linthorst, Executive Director of the PCAF Secretariat 

The Standard provides detailed methodological guidance for measurement and disclosure of GHG emissions associated with six asset classes: listed equity & corporate bonds, business loans & unlisted equity, project finance, commercial real estate, mortgages and motor vehicle loans. Future editions of the Standard will expand this coverage of asset classes and include case studies.   

Thanks to the Standard, for the first time financial institutions are equipped with globally harmonized, robust, transparent methods to consistently measure and disclose financed emissions, a metric that enables them to: assess climate-related risks in line with the Task Force on Climate-related Financial Disclosures (TCFD), set science-based targets using the sectoral decarbonization approach developed by the Science Based Targets initiative, report to stakeholders with the CDP disclosure framework, and inform climate strategies and actions to develop innovative financial products that support the transition toward a net-zero emissions economy.     

“A standardized method of measuring and reporting emissions is critical for the financial sector to make meaningful emissions reductions,” said Pankaj Bhatia, Deputy Director, Climate Program and Global Director, GHG Protocol at World Resources Institute. “The PCAF’s new Global GHG Accounting and Reporting Standard for the Financial Industry offers financial institutions tools and guidance needed to accurately account for their emissions. The Standard will be a powerful tool to help the sector responsibly reduce its carbon footprint and do is part to tackle climate change.” 

– Pankaj Bhatia, Deputy Director, Climate Program and Global Director, GHG Protocol at World Resources Institute 

The PCAF Standard is being implemented in five regions: Africa, Asia-Pacific, Europe, Latin America and North America. Each region has regional implementation teams with a clear governance structure. Each team receives technical assistance to implement GHG accounting and reporting at no cost. The lessons learned through the regional implementation feed into the refinement of the Global GHG Accounting and Reporting Standard for the Financial Industry.  

 

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GHG Protocol contact information: Maxine Chikumbo, Social Media Specialist, World Resources Institute,

E: maxine.chikumbo@wri.org

 

PCAF contact information: Angélica Afanador, Manager, PCAF Secretariat,

E: info@carbonaccountingfinancials.com

 

About the Greenhouse Gas Protocol

GHG Protocol establishes comprehensive global standardized frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains and mitigation actions. To learn more visit https://ghgprotocol.org/  

 

About the Partnership for Carbon Accounting Financials (PCAF)

In September 2019, the Partnership for Carbon Accounting Financials (PCAF) was launched globally. Currently, more than 100 banks and investors have subscribed to the PCAF initiative. PCAF participants work together to jointly develop the Global GHG Accounting and Reporting Standard for the Financial Industry to measure and disclose the greenhouse emissions of their loans and investments. By doing so, PCAF participants take an important step to assess climate-related risks, set targets in line with the Paris Climate Agreement and develop effective strategies to decarbonize our society. For more information see https://carbonaccountingfinancials.com/ 

(Photo: Marhus Spiske / Unsplash) 

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