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PCAF stands for the Partnership for Carbon Accounting Financials. It is a global industry-led initiative to measure and disclose the greenhouse gas emissions financed by loans and investments. Ultimately, this is meant to trigger changes in banks’ and investors’ portfolios which align with the goals of the Paris Agreement.

PCAF was created because a group of financial institutions, ranging from banks, insurance to asset owners and managers, realized their role was crucial in accelerating the transition to a decarbonized economy. Banks represent most of the available capital globally and since the Paris Climate Agreement the largest banks have still invested more than $3.8 trillion into the fossil fuel sector. This is equivalent to more than $2bn for every day since the end of 2015, with no downward trend and no assessment of the carbon impact of that finance. Given the scale of the climate challenge and the crucial role of the financial sector in facilitating the net zero carbon transition, the Partnership for Carbon Accounting Financials was created.

PCAF has set two objectives: (i) develop a global greenhouse gas (GHG) accounting standard making GHG accounting common practice within the financial sector; (ii) attract more than 1,000 financial institutions by 2025 globally that assess and disclose the emissions associated with their loans and investments.

Building on the GHG accounting methodologies developed in the Netherlands and North America, a harmonized global GHG accounting standard for financial institutions was developed. The Standard covers various asset classes (such as mortgages, commercial real estate, business loans, listed equity and corporate bonds, etc.) and is open-source and transparent.

As PCAF develops a globally harmonized standard for the way financial institutions measure and disclose climate impact, specifically financed emissions as defined under the Greenhouse Gas Protocol, it becomes possible to act to reduce impact and align with global and national policy goals.

The GHG Accounting and Reporting Standard developed by PCAF is a foundation for various other initiatives, making PCAF complementary to existing climate initiatives.

Through GHG accounting, PCAF members become aware of their impact and are triggered to have a tangible impact in the real economy.

PCAF enables the financial industry to take meaningful, collective, and global action against climate change by creating open-source GHG accounting methodologies covering various asset classes.

At the end of 2018, PCAF members measured the GHG emissions associated with these assets: a total of $1.2 trillion USD. Furthermore, some PCAF members are already taking action on their portfolios by developing dedicated financial products that incentivize clients to engage in low-carbon solutions.

• Example 1: To stimulate home owners to improve the energy efficiency of their house, Triodos Bank developed a dedicated financial product that offers a lower interest when the energy efficiency of the house is improved.
• Example 2: ABN AMRO developed several tools in the past years to track CO₂ emissions in real estate and to support clients in the transition to sustainability.
• Example 3: Beneficial State Bank calculates the emissions from their consumer vehicle loans and incentivizes clients to purchase low emitting vehicles.

PCAF is the only industry-led initiative in the market that enables financial institutions to assess and disclose greenhouse gas emissions of loans and investments through an open-source and transparent approach built on the Greenhouse Gas Protocol.

PCAF complements other climate initiatives addressing the financial sector, such as:

• Task Force on Climate-related Financial Disclosures (TCFD): PCAF provides a framework for financial institutions to disclose their greenhouse gas emissions, which is one of the TCFD recommendations.
• Paris Agreement Capital Transition Assessment (PACTA): PCAF complements PACTA by providing GHG accounting methods for a wider scope of financial assets (i.e. beyond equity and corporate bonds). The data used in PACTA’s tool is helpful for the implementation of PCAF’s approach for listed equity and corporate bonds.
• Science Based Targets Initiative (SBTi): PCAF has developed GHG accounting methods for relevant asset classes and financial institutions can use them to calculate their current exposure of their portfolio, which is the first step to set SBTs.
• UN Principles on Responsible Investing and Banking (PRI and PRB): PCAF fully aligns with PRI and PRB and helps investors and banks to fulfill the principles on transparency, accountability and disclosure.

PCAF is organized by a steering committee comprised of representatives of: ABN AMRO, Amalgamated Bank, ASN Bank, Global Alliance for Banking on Values (GABV), Morgan Stanley, the Net-Zero Asset Owner Alliance (represented by Nordea Life & Pension), NMB Bank, and Triodos Bank.

PCAF is sponsored by the William and Flora Hewlett Foundation and the IKEA Foundation. Various other actors are endorsing and promoting PCAF within their regions or among their members.

Yes. Participation in PCAF includes an annual fee to support the activities of PCAF. Please contact the PCAF Secretariat for more information.

Access to PCAF's web-based emission factor database and corresponding database methodologies is exclusively available to PCAF signatories.

PCAF pursues inclusive growth to attract financial institutions of all types, considering diversity of geographies and sizes of institutions. The signatory fee is dependent on size, enabling participation of smaller financial institutions with no or low fees.

Financial institutions that join PCAF commit to assess and disclose the GHG emissions associated with their portfolio of loans and investments within a period of three years using jointly developed accounting methodologies. A commitment letter can be provided on request.

Furthermore, financial institutions that commit to PCAF will obtain free technical assistance to start measuring emissions financed by loans and investments. More details on what is included in this technical assistance are available here.