UTRECHT, NETHERLANDS - 8 September 2022 – The Partnership for Carbon Accounting Financials is pleased to release a special press release covering updates on various activities in its global workstreams. This multi-part news item covers PCAF’s recent milestone of reaching 300+ signatories as well as status updates on long-anticipated guidance documents and methodologies under development, including:
Earlier this month, PCAF welcomed its 300th signatory. The rapid growth in signatories demonstrates the significant uptake of the industry-led initiative, which in the last three months has been driven mainly by commitment letters from financial institutions in the United States, the UK, and the Asia-Pacific region. In April 2022, PCAF achieved its goal of reaching 250 signatories more than eight months ahead of schedule.
The second edition of the Global GHG Accounting and Reporting Standard for the Financial Industry will build on and supersede the first edition of PCAF’s flagship methodology published in November 2020. The upcoming Standard is expected to include GHG accounting methodologies for calculating financed emissions from sovereign debt as well as methodologies for calculating GHG emission removals. Existing asset class methodologies are expected to largely remain the same.
The new proposed GHG accounting methodologies were released for public consultation in late 2021, mirroring the public consultation process held for the first edition of the PCAF Standard in 2020. The second edition of the PCAF Standard is currently undergoing rigorous review by the Greenhouse Gas Protocol, which is widely regarded as the world’s foremost provider of GHG accounting standards. The first edition of the PCAF Standard underwent a similar review in 2020 and earned the “Built on GHGP” mark, which recognizes that the methodologies in the PCAF Standard are in conformance with GHG Protocol standards. It is critical for PCAF that the second edition of the Standard maintain this mark to show its robustness and credibility as a global GHG accounting standard.
The PCAF Secretariat hopes to publish the second edition of the Standard by the end of 2022. The launch date will be widely announced in advance as soon as timelines are more clearly defined.
This report provides clear guidance to financial institutions on how to join the net-zero journey and decarbonize their building portfolios along a stepwise approach, from any starting position. It is intended for any financial institution, particularly for banks and investors with known use of proceeds in mortgages and commercial real estate portfolios. The guidance has been developed in close consultation with the Core Project Team of the PCAF project Financing towards net-zero buildings, which consists of a diversified set of representatives from the financial industry; and the Expert Advisory Group, which comprises key stakeholders from the building and financial sectors at both European and global levels.
The Guidance has been developed and is currently being prepared for publication.
The launch of the Guidance on financing the European building transition to net zero is planned for 22 September 2022. Register for the launch here.
The Technical Guidance is a joint effort by PCAF and partners CRREM and GRESB which aims to provide financial institutions and related stakeholders with transparent, consistent, and harmonized guidance on the accounting and reporting of real-estate-related operational emissions. It offers additional specifications to PCAF's Global GHG Accounting and Reporting Standard for the Financial Industry on a range of technical, data, and standards issues relating to GHG from real estate. This guidance, however, does not supersede the PCAF Standard and should be considered an optional best practice.
Stakeholders were invited to provide feedback on the draft Technical Guidance in a public consultation from 25 May – 28 June, 2022. Upon receipt of feedback, the joint team has been revising and synthesizing the input with the goal of integrating it into and further refining the Technical Guidance.
PCAF plans to publish the Technical Guidance for Real Estate Operations in autumn 2022. The exact launch date will be announced in advance.
In July 2022, PCAF published the Progress Report on insurance-associated emissions and launched a public consultation on the report to collect stakeholder feedback. PCAF, together with a working group of 16 global insurance and reinsurance companies, is developing the first set of methodologies that will enable the sector to measure and disclose GHG emissions associated with re/insurance underwriting portfolios.
During the summer months, the PCAF Insurance-Associated Emissions Working Group has continued to work on the proposed methodologies and conduct further testing on proposed attribution factors. The public consultation is open until 26 August. With the results from the broad testing efforts and the feedback received via the consultation, the methodologies will be finalized.
Following the finalization of the methodologies pending the feedback received during the public consultation, the PCAF Secretariat hopes to publish the first set of methodologies for the re/insurance sector in November 2022.
PCAF released the new proposed GHG accounting methodology for capital markets instruments for public consultation in late 2021, mirroring the public consultation process held for the first edition of the PCAF Standard in 2020. Upon receipt of feedback from external stakeholders, the PCAF Capital Markets Working Group resumed work on the development of the methodology in the beginning of 2022 and has made substantial progress on a final proposed method.
The working group is preparing the final draft of the proposed method, which will be available for a final round of public consultation. PCAF strongly encourages feedback from all relevant stakeholders as the working group seeks input on key methodological elements.
PCAF aims to launch the final draft for a public consultation in early September 2022 that will remain open for four weeks. The PCAF Secretariat aims to publish the Capital Markets method by the end of 2022. The launch date will be widely announced in advance as soon as timelines are more clearly defined.
The Partnership for Carbon Accounting Financials (PCAF) was launched globally in September 2019. Currently, more than 300 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.
Learn more at: https://carbonaccountingfinancials.com
***For more information, please contact:
Giel Linthorst
Executive Director, PCAF
info@carbonaccountingfinancials.com
Angélica Afanador
Program Manager & Latin America Team Lead, PCAF
info@carbonaccountingfinancials.com
