Twelve Dutch financial institutions – the Platform for Carbon Accounting Financials (PCAF) – have agreed to work together to jointly develop open source methodologies to measure the carbon footprint of their investments and loans. By measuring and disclosing this information they expect to develop more effective strategies that help contribute to a low carbon society, in the hope that other institutions will follow suit.
PCAF was launched via a Dutch Carbon Pledge calling on the negotiators at the Paris Climate Summit in 2015 to take on board the role that investors and financial institutions can play in delivering an essential shift to a low carbon economy. If it’s successful the group will create a more transparent approach to assessing the carbon footprint for stakeholders inside and outside the Dutch financial industry.
Developing a carbon accounting methodology for financed emissions
Creating a common methodology is challenging given the wide variety of possible approaches and the large number of methodologies that have been developed in recent years.
For that reason the platform has deliberately been limited to a relatively small number of member institutions in the hope that this will increase the chances of success. However, a sounding board, open to other institutions in The Netherlands, is also in place to benefit from expertise outside this core group.
The members of the platform are ABN AMRO, Achmea Investment Management, Actiam, APG, ASN Bank, FMO, MN Services, PGGM, Stichting Pensioenfonds Metaal en Techniek (PMT), Stichting Pensioenfonds van de Metalektro (PME), Triodos Bank and de Volksbank. The platform is Chaired by ASN Bank.
Smaller working groups have convened to develop initial proposals for a range of asset classes: corporate finance, project finance, listed equities, retail banking, listed equity, private equity, real estate and bonds. The group expects to convene for up to two years. At that point it will take a decision on whether to extend its work.
PCAF Progress report
PCAF has published a progress report, summarizing the results of the working groups on ‘mortgages’, ‘listed equity’, ‘project finance’ and ‘government bonds’. The report proposes ‘work in progress’ methodologies to calculate financed emissions of these asset classes. it has been distributed to a number of institutions for peer-review. A final report will be published in October 2017.
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Click on the image on the left to download the report.