Portfolio Carbon Initiative
The world is already transitioning to a low-carbon economy. Financial institutions have the power to expedite and smooth the transition by limiting their contribution to the climate problem and growing their contribution to the climate solution. The Portfolio Carbon Initiative, a partnership with Sustainable Finance Observatory (formerly 2 Degrees Investing Initiative) and UNEP Finance Initiative (UNEP FI), develops a series of resources to guide financial institutions in assessing the climate impact of their activities and carbon asset risk.
This initiative was previously called the Financed Emissions Initiative.
Portfolio Carbon Initiative Goals and Work Streams
Portfolio Carbon Initiative has two goals:
- Provide guidance on how to define, assess and track climate impact 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 Portfolio Carbon Initiative operate via three work streams.
Work stream 1: Asset owner climate friendliness
Tailored to asset owners, this work stream produced a comparative analysis of current climate friendliness metrics, Climate Strategies and Metrics: Exploring Options for Institutional Investors.
Work stream 2: Bank climate friendliness
The working paper produced through this workstream, Exploring Metrics to Measure the Climate Progress of Banks, provides insight into which metrics public- and private-sector banks can use, depending on asset class, to report on the extent to which their activities help or harm the transition toward a low-carbon economy.
Work stream 3: Carbon asset risk
The guidance produced through this work stream, Carbon Asset Risk: Discussion Framework, 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 managed.
Related News
The World Is Counting on Banks to Deliver Climate Finance. Counting Their Progress Is No Easy Feat.
Banks are connected to every part of the economy through their investing and lending activities. That means they play a crucial role in financing the transition to a low-carbon economy. The financial sector is increasingly aware of the need to shift capital flows away from companies and activities that contribute to the climate problem and into climate solutions.
Financial Sector Guidance Technical Working Group Participation
UNEP FI and GHG Protocol invite interested stakeholders to participate in a technical working group for the development of a financial sector GHG accounting guidance and carbon asset risk guidance. Please see the Terms of Reference for details about the Technical Working Group process and a link to Survey Monkey where you can express your interest in participation.
Banks to Receive Guidance on Reporting Emissions in Lending
When the 2011 Newsweek Green Rankings were published, it came as a surprise to many that seven of the worst performing US companies were financial firms. The reason for such a poor performance was inadequate reporting of emissions in corporate supply chains; in the case of financial firms, emissions from their lending and investment portfolios.