Utrecht/London, 22 JUNE 2023: The need for more robust data to accurately measure and disclose emissions has rarely been so urgent. To address the importance of data quality in the improvement of this process, the Partnership for Carbon Accounting Financials (PCAF) and CDP, the global environmental disclosure non-profit, have authored a joint paper examining the role of data quality in the journey to decarbonization.
The ability to accurately report emissions is contingent on the continuous improvement of data quality over time but too often, ‘perfect’ is sought at the expense of ‘good’ when it comes to the quality of data. Whilst complete data of the highest quality is preferred to support the necessary progress towards decarbonization, using available approximate data as a starting point for calculations will improve the quality of data over time.
The co-authored paper examines the challenge posed by a lack of standardization in data quality scoring, which has a significant impact on the financial system’s progress to decarbonization. This lack of standardization not only results in inaccuracy and inconsistency in emissions reporting between financial institutions but can make cross-comparison and benchmarking more difficult.
In the paper, PCAF and CDP set out how their continued collaboration objective to align their respective data quality systems to simplify and streamline the process of measuring and disclosing emissions for the financial system.
Since December 2021, PCAF and CDP have worked in partnership to promote the PCAF Standard and increase the assessment and disclosure of financed emissions amongst financial institutions globally. The collaboration aims to enable transparent disclosures allowing financial institutions and other stakeholders to better understand the climate impact of their portfolios. The assessment and disclosure of financed emissions provide financial institutions with insight into their portfolios’ carbon footprints and alignment with global climate goals.
Angélica Afanador, Executive Director of PCAF comments “We’re delighted to deepen our collaboration with CDP as we support the financial system move towards a greater level of standardization in emissions reporting. The importance of data quality cannot be overstated. In order for financial institutions to set accurate and achievable targets, the continued improvement of data quality is imperative.”
Nicolette Bartlett, Chief Impact Officer comments, “Mapping of portfolio emissions for financial institutions is a vital issue when facilitating the absolute curbing of emissions needed to tackle climate change. The publication of this paper with PCAF and our alignment on data quality scoring systems is a direct response to this gap in climate data reporting. Measuring data quality is essential for the financial sector to utilize the right kind of data and more accurately track its own pathway toward net zero.”
The full paper is available to read here.
About the Partnership for Carbon Accounting Financials
The Partnership for Carbon Accounting Financials (PCAF) was launched globally in September 2019. Currently, more than 380 banks and investors have subscribed to the PCAF initiative. PCAF participants 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 and investments. By doing so, PCAF participants 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.
About CDP
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 740 financial institutions with over $130 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests.
Nearly 20,000 organizations around the world disclosed data through CDP in 2022, including more than 18,700 companies worth half of global market capitalization, and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy.
CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative.
Find out more via www.cdp.net or follow us on twitter @CDP
