We are excited to share highlights from PCAF’s New York Climate Week 2024 event, where over 200 leaders from the global financial industry gathered to discuss the evolving landscape of carbon accounting. Hosted at Deutsche Bank, the event featured a series of keynote speeches, panel discussion, and breakout sessions, all centered on advancing financial institutions' role in decarbonization. Opening remarks were offered by Emily Kreps, Global Head of ESG and Sustainable Finance at Deutsche Bank and Madeline Schneider, Director of Operations at PCAF.
The text below the video breaks down the key takeaways from the event for those who were unable to attend in-person.
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The day kicked off with a keynote speech from Bella Tonkonogy, Senior Advisor at the U.S. Department of the Treasury's Climate Hub, who spoke about the importance of financial sector leadership in addressing climate risk. She emphasized the necessity for stronger regulatory frameworks to ensure financial institutions can meet their climate-related commitments, particularly in reducing financed emissions. Tonkonogy also touched on the challenges posed by Scope 3 emissions and called for a more unified approach across regulators and financial entities to foster accountability.
Following this, Ivan Frishberg, PCAF’s President and Chief Sustainability Officer at Amalgamated Bank, and Angélica Afanador, PCAF’s Executive Director, delivered their joint keynote. They offered an in-depth look at PCAF’s recent achievements and outlined future priorities. Afanador emphasized the growth of PCAF’s community, which now includes over 520 financial institutions and a growing number of accredited partners, highlighting the importance of collaboration in ensuring consistent, comparable, and quality carbon accounting measurement and disclosures.
Frishberg underscored the need for interoperability between carbon accounting standards and other regulatory frameworks, pointing out that financial institutions often face overlapping and sometimes conflicting reporting requirements. He stressed that aligning these standards would not only reduce the reporting burden but also improve the quality of data available, facilitating more meaningful climate action.
“We believe that harmonization is not only a technical challenge but a pathway to real-world impact,” Frishberg said. “By ensuring consistency and transparency in carbon accounting, we can empower financial institutions to drive meaningful decarbonization efforts across their portfolios.”
A key highlight of the event was the panel discussion moderated by Caspar Noach, PCAF’s Technical Director, which focused on the theme of "Balancing Relevance and Complexity through Harmonization and Interoperability." The panelists—Elizabeth Seeger, Board Member of ISSB; Radhika Mehrotra, Associate Director of Capital Markets at CDP; Jesica Andrews, Head of Climate Accountability at the United Nations Environment Programme Finance Initiative (UNEP-FI); and Rob McDonough, Director of ESG and Regulatory Initiatives at Angel Oak—offered their unique perspectives on the challenges and opportunities in carbon accounting today.
The conversation opened with a discussion on the growing number of climate reporting standards and the need for interoperability to streamline disclosures. Seeger emphasized the International Sustainability Standards Board (ISSB)’s role in creating a “global baseline” for sustainability reporting, noting the progress being made in incorporating emissions disclosure for financial institutions into their framework. She highlighted the importance of Scope 3 emissions reporting, a challenge that has been amplified by varying regional regulations.
Mehrotra from CDP followed up by discussing how CDP has aligned its questionnaire with both ISSB standards and the PCAF Standard to simplify reporting processes for financial institutions. This alignment, she noted, will significantly reduce complexity for institutions while enhancing the quality and transparency of disclosed data. She explained that the goal is to make it easier for financial institutions to focus on climate action, not just compliance.
A significant portion of the panel discussion revolved around data challenges, particularly in emerging markets and among small and medium-sized enterprises (SMEs). Andrews from UNEP-FI stressed the critical need for improving access to high-quality emissions data in these regions. She pointed out that while large corporations are making strides in emissions disclosures, SMEs often lack the resources and expertise to measure their carbon impact. McDonough from Angel Oak added that financial institutions have a role to play in guiding SMEs through the disclosure process, whether by providing technical support or incentivizing sustainable practices through access to capital.
The panelists agreed that while the path to harmonized carbon accounting standards is complex, it is necessary to drive real-world decarbonization. Seeger concluded that without comparable and high-quality disclosures, it’s difficult to measure real impact, reiterating the importance of collaboration across standard-setting bodies.
Following the panel discussion, attendees participated in breakout sessions focused on several pressing issues in the world of carbon accounting. The breakout sessions provided attendees with a deeper dive into some of the most pressing issues facing the financial sector, particularly around GHG accounting, data quality, and challenges specific to regions and sectors.
These discussions shed light on both the practical difficulties financial institutions face and the innovative approaches they are adopting to address them.
While many financial institutions consider themselves frontrunners, confident in the PCAF methodologies and improving data quality, they also face difficulties in covering their entire portfolios. Attendees discussed the need for internal knowledge sharing, from those just starting the GHG accounting journey to those with more established systems. A recurring challenge is identifying what data is material and managing organizational boundaries, especially in more complex portfolios.
A significant focus of the discussion was on the regional disparities in data quality and availability, particularly in emerging markets. Participants emphasized the lack of granular, standardized data and the challenges in overcoming regulatory differences across regions. Many financial institutions are turning to partnerships with universities and local organizations to create more robust databases, though this has proven to be a slow process. Attendees agreed that more support from government organizations, NGOs, and data providers is essential to overcoming these barriers.
The complexities of rebaselining were discussed in detail, with mixed views on whether to make corrections for portfolio shifts. Some advocated for maintaining data as-is to show portfolio composition changes over time, while others suggested corrections to reflect the improvement of existing investments. The consensus was that both approaches offer valuable insights, and participants called for PCAF to provide clear guidelines on qualifying events for rebaselining, threshold levels, and alignment with target-setting frameworks like the Science Based Targets Initiative (SBTi). Attendees noted that while rebaselining is resource-intensive, it is crucial for transparency and ensuring that portfolio emissions reflect real-world changes.
Many financial institutions struggle with obtaining high-quality Scope 3 emissions data from portfolio companies, particularly from SMEs. The fear of reporting poor data and the complexity of measuring Scope 3 emissions has led some institutions to avoid disclosing this information altogether. Attendees emphasized the need to start even with imperfect data, focusing on actions that will lead to decarbonization. Collaboration with data providers and ensuring third-party reviews for mandatory assurance were suggested as ways to increase confidence in the data and foster transparency.
SMEs often lack both the expertise and incentive to measure their emissions. Attendees shared success stories, such as initiatives to incentivize bankers to encourage SME clients to measure their emissions. This led to broader discussions on how financial institutions can guide SMEs through the disclosure process by offering technical support and highlighting the importance of emissions data not only for regulatory compliance but also for business strategy.
These sessions reinforced the message that collaboration and knowledge-sharing are critical to advancing carbon accounting. PCAF’s role in providing methods and guidance, and fostering partnerships is instrumental in helping financial institutions in their decarbonization journeys.
Looking Ahead: A Commitment to Impact
The event concluded with closing remarks from Angélica Afanador, who reflected on the event’s success and PCAF’s ongoing commitment to driving climate action. “This event reinforces that our strength lies in our ability to collaborate, share knowledge, and move forward together,” she said. Afanador also shared a clear and practical call to action, inviting participants to engage further with PCAF by sharing their needs and challenges, emphasizing that PCAF’s role is to support financial institutions embark on the first step of their decarbonization journeys – measuring the emissions associated with their financial activity.
As we look ahead, PCAF remains focused on ensuring that the standards we develop continue to align with broader global efforts and strengthen real-world impact. We extend our thanks to all who attended, and we look forward to seeing the continued progress in carbon accounting and climate action across the financial sector.
