The Partnership for Carbon Accounting Financials (“PCAF”), an industry-led partnership to standardize carbon accounting for the financial sector, has announced that more than 50 financial institutions worldwide, representing 2.9 trillion dollars in assets, have committed themselves to assess and disclose the GHG emissions of their loans and investments.
It’s the largest such commitment ever made in the financial sector. The financial institutions will utilize the carbon accounting standard developed by PCAF and it represents the launch of the first-ever global carbon accounting initiative available for use by financial institutions anywhere in the world.
The open-access, free-of-charge PCAF initiative allows banks and investors all across the world to assess the GHG emissions of their portfolios on the path to aligning their business strategies with the Paris Climate Agreement.
“The effects of the climate emergency are tangible. There is an urgent need to address climate change, and financial institutions have a critical role to play in the world’s efforts to limit global warming and fulfill the obligations of the Paris Agreement. The money we invest can make or break climate solutions – from clean energy and energy efficiency to forest protection and public transit. The problem is that it’s tough for institutions to know what their impact is because their activities and portfolios are very complex. By standardizing the way we measure emissions, it becomes possible to act to reduce it,” said Keith R. Mestrich, President and Chief Executive Officer of Amalgamated Bank. “We are inviting financial institutions from around the globe to join these efforts.“
“There is no time to lose to address the climate emergency. Banks must act now on their responsibility to limit global warming to within safe limits. PCAF enables the financial industry to take meaningful, collective, and global action to combat climate change. Knowing the emissions of their loans and investments means banks can be transparent with their stakeholders. They can better understand and manage the risk of the climate emergency for their business. And, crucially, they can make informed decisions that limit the negative impact, and increase the positive impact, of their financial decisions on the climate,” said Peter Blom, CEO, Triodos Bank (The Netherlands),Chair of The Global Alliance for Banking on Values (GABV).“PCAF is a concrete, scalable initiative by the industry for the industry, that helps financial institutions to connect their activity with the Paris Climate Goals. It’s relevant for all banks, large or small, wherever they are in the world.”
“PCAF is tried and tested in the Netherlands, providing value to financial institutions, their clients, and other climate initiatives. Now, PCAF is going global,” said Kees van Dijkhuizen, CEO of ABN AMRO. “Our experience in the Netherlands is that measuring and tracking climate impact drives concrete action and change. At ABN AMRO, PCAF helped us understand that our 800,000 residential mortgages are one of the areas that have the highest carbon impact. With that knowledge, we now promote mortgages that incentivize customers to take energy efficiency measures. Climate action like that is not only good for business – but is a duty to our clients, the planet, and to future generations.”
Since its founding at the 2015 Paris Climate Summit, PCAF institutions have worked together to jointly develop open-source methodologies to measure the carbon footprint of their investments and loans. Since 2018, PCAF institutions have quantified the emissions impact associated with these assets for a total of $1.2 trillion USD.
About the Partnership for Carbon Accounting Financials
PCAF was founded by fourteen Dutch financial institutions as the Platform for Carbon Accounting Financials (PCAF) via a Dutch Carbon Pledge at the Paris Climate Summit in 2015. PCAF institutions work together to jointly develop open-source methodologies to measure the carbon footprint of their investments and loans. By measuring and disclosing this information, PCAF institutions develop effective strategies to contribute to a low carbon society. PCAF is organized by a steering committee comprised of representatives of ABN AMRO, Amalgamated Bank, ASN Bank, Global Alliance for Banking on Values (GABV) and Triodos Bank.