Financed emissions

THE ROLE OF THE FINANCIAL SECTOR
The financial sector plays a critical role in strengthening transparency and accountability in how greenhouse gas (GHG) emissions are measured and reported across portfolios. Reliable emissions data
helps financial institutions better understand their exposure to emissions-related risks and dependencies
within their lending, investment, underwriting, and re/insurance activities.
The GHG emissions of financial activities (scope 3 category 15) are the largest portion of financial institutions’ overall emissions. Measuring these emissions provides a foundation for risk assessment,
disclosure, and performance tracking. Through standardized methodologies, financial institutions can
identify highest emitters in their portfolios, improve reporting accuracy, and integrate these insights into
decision-making and portfolio management. This approach fosters informed dialogue between financial
institutions, regulators, and stakeholders, strengthens market confidence, and promotes consistent, datadriven strategies for managing emissions across the financial industry.

THE ROLE AND HISTORY OF PCAF
Prior to the establishment of the Partnership for Carbon Accounting Financials (PCAF), financial
institutions relied on varied approaches and accounting methodologies to measure financed emissions
and used different reporting metrics, which led to inconsistent assessments of the industry’s climate
impact. This lack of standardization hampered transparency, comparability, and accountability across the
financial sector. PCAF was established to harmonize greenhouse gas (GHG) accounting and disclosure across the financial sector. It provides standardized methodologies that enable financial institutions to assess the GHG emissions associated with their loans, investments, (re)insurance underwriting, and other financial products and services. Founded in 2015 by Dutch financial institutions, PCAF expanded to North America in 2018 and scaled globally in 2019.

Today, this industry-led initiative has grown to include more than 670 financial institutions worldwide (as of November 2025),3 all committed to measuring and disclosing the GHG emissions of their portfolios. PCAF fosters collaboration among financial institutions to improve GHG methodologies for the financial sector, building a community focused on shared knowledge and action. PCAF is led by the Board of Directors which consists of Justine Bolton (FirstRand Limited), Dinesh Dulal (NMB Bank), Ivan Frishberg (Amalgamated Bank), Prajña Khanna (Nasper-Prosus Group), Tjeerd Krumpelman (former ABN AMRO), James Niven (Global Alliance for Banking on Values), Peter Sandahl (Nordea Group), and Alison Vipond (former Lloyds Banking Group).

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