PCAF welcomed today the commitment of BNP Paribas to measure and disclose financed emissions using the PCAF Global GHG Accounting and Reporting Standard for Financial Industry. BNP Paribas’ commitment marks a significant achievement for PCAF: the industry-led initiative has surpassed its goal of reaching 250 signatories by year-end 2022 with almost nine months to spare.
“From local to global to local: from a Dutch financial initiative in 2015 to a global launch in 2019, 250 financial institutions are now collaborating at a local level. Helping each other to implement and improve the measurement and disclosure of Scope 3 emissions is key to the success of PCAF. It’s amazing to see the growth of signatories from all regions and all types of financial institutions and the strengths of collaboration.” – Giel Linthorst, Executive Director of PCAF and Director at Guidehouse
From niche initiative to climate finance cornerstone
PCAF has undergone a significant transformation since it launched globally in September 2019. At that time, PCAF had only 55 signatories which collectively represented just under $4 trillion in total financial assets. This initial group of pioneers consisted largely of PCAF’s original Dutch founders and smaller values-based banks. Today, 30 months later, PCAF has increased its number of signatories by 350% to over 250 financial institutions globally, representing more than $71 trillion in total financial assets. PCAF’s signatories are diverse in not only their geography and size, but also their type: in addition to banks, the partnership consists of asset managers, asset owners, insurers, private equity firms, and more. Of these 250+ signatories, 69 financial institutions representing $33 trillion have already disclosed their financed emissions using the PCAF Standard at least once.
The PCAF Standard’s rapid and widespread adoption by financial institutions has made it the single most widely used methodology for measuring and reporting financed emissions globally. This is especially relevant as more regulators move to require the disclosure of Scope 3 emissions by financial institutions. The European Banking Authority, the US Securities and Exchange Commission (SEC), and the International Sustainability Standards Board (ISSB) all reference the PCAF Standard in their proposals.
PCAF’s position in the global climate finance ecosystem was further solidified in October 2021, when the Task Force on Climate-related Financial Disclosures (TCFD) officially embedded the PCAF Standard into its financial sector recommendations. As the TCFD’s recommendations become the guiding principles for climate disclosure mandates, such as in the US, the UK, New Zealand, Hong Kong, and most recently, Canada, the PCAF Standard is becoming enshrined in law in all but name.
In the spirit of collaboration, PCAF has worked to align as much as possible with other leading industry initiatives. Notably, the PCAF Standard is recommended by the Science Based Targets initiative (SBTi) in its Financial Sector Science-Based Targets Guidance and enables financial institutions to answer CDP’s Climate Change Questionnaire for Financial Services. PCAF collaborates with the IIGCC’s Paris Aligned Investment Initiative, which points to the PCAF Standard as the leading accounting approach underpinning the Net Zero Investment Framework (NZIF). The UN-Convened Net Zero Asset Owner Alliance, represented on the PCAF Steering Committee, incorporated PCAF in its 2025 Target Setting Protocol. PCAF’s website lists all its global partners and collaborators.
“Financing energy transition has been at the core of BNP Paribas’ environmental responsibility since 2011. This long-standing strategy yielded robust commitments like the one we took in 2021 to monitor our activities in order to move to financing a carbon neutral economy by 2050. Transitioning to a low-carbon economy is an important part of our newly released 2025 strategic plan, and we are also committed to disclosing our financed emissions based on 2022 data. Such commitments require consistent data and reporting, as well as collaboration with peers in order to develop common methodologies. We are therefore delighted to be joining PCAF to contribute to collectively tackle climate change.” – Laurence Pessez, Global Head of Corporate Social Responsibility of BNP Paribas Group
Looking to the future
PCAF achieved by a sizeable margin its goal, set in 2020, to grow the partnership to over 250 participating financial institutions by year-end 2022. As a next step, the PCAF Steering Committee is developing a new growth strategy to be launched in 2022.
In the meantime, the core work continues through several workstreams: PCAF will publish the second edition of the PCAF Standard during second quarter, which is expected to include methodologies for the GHG accounting of sovereign bonds and emission removals. PCAF’s insurance working group launched in collaboration with the UN-convened Net-Zero Insurance Alliance (NZIA) just finished a public consultation on a scoping document for insurance-associated emissions. Additionally, the PCAF Working Group on Capital Markets is developing a methodology to measure and disclose facilitated emissions from the facilitation of capital market instruments, following the publication in November 2021 of a discussion paper on the subject.
Critically, PCAF will strive to not only improve the quantity of financed emissions disclosures but also their quality. The PCAF Secretariat will continue to support PCAF signatories to ensure that disclosures are high-quality and PCAF-aligned. Now more than ever, it is vital to set model examples for the rest of the financial industry as it progresses on its journey to net zero.
About the Partnership for Carbon Accounting Financials
PCAF began in the Netherlands in 2015 under the leadership of ASN Bank with a handful of Dutch financial institutions, expanded to North America in 2018, and launched globally in September 2019. Currently, more than 250 financial institutions have subscribed to the PCAF initiative. PCAF signatories work together to jointly develop the Global GHG Accounting and Reporting Standard for the Financial Industry to measure and disclose the greenhouse gas emissions of their loans, investments, insurance liabilities and other financial products and services. By doing so, PCAF signatories 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.