The Partnership for Carbon Accounting Financials (PCAF) and the non-profit global environmental disclosure platform CDP announce a collaboration to enhance the capacity of financial institutions to measure and disclose their financed emissions using the PCAF Global GHG Accounting and Reporting Standard for the Financial Industry.

This partnership will allow PCAF and CDP to combine their resources and networks. Through its goal of capacity building, this collaboration aims to help financial institutions better understand their climate impact and exposure to carbon-intensive industries.

The assessment and disclosure of financed emissions gives financial institutions insight into their portfolios’ carbon footprints and alignment with global climate goals. In line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), PCAF and CDP provide accessible steps to calculating and disclosing financed emissions.

Almost all financial institutions’ climate impact and risk is driven by the activities they finance in the wider economy, with CDP research finding that financed emissions are 700 times greater than operational emissions. However, only a quarter of financial institutions disclosing to CDP report their portfolio emissions. Through this collaboration, CDP and PCAF hope to see a growth in the number of financial institutions reporting financed emissions in line with PCAF Standard, and through CDP’s Financial Services Climate Change Questionnaire, to fill the critical data gap in climate reporting.

PCAF and CDP will work together to develop and provide workshops, reports, and case studies for their respective networks of financial institutions. The material will focus on accounting and TCFD-aligned reporting of financed emissions, in line with the PCAF Standard.