Since 2015, fourteen financial institutions from the Netherlands, under the leadership of ASN Bank, have worked together to harmonize, develop and implement carbon accounting methodologies for eight asset classes.
Inspired by the Dutch PCAF, a group of 12 financial institutions in North America have been collaborating under the leadership of Amalgamated Bank to adopt these methodologies to the North American context. The report of PCAF North America is expected to be released in October 2019.
Building on the carbon accounting methodologies developed in the Netherlands and North America, a global carbon accounting standard for financial institutions will be developed. The global carbon accounting standard builds upon the GHG Protocol’s technical guidance for calculating GHG emissions financed by loans and investments.
The global carbon accounting standard will cover all major asset classes (e.g. mortgages, commercial real estate, listed equity, business loans, project finance) by providing detailed methodological guidance for each asset class.
"Follow the money" is a key principle of the global standard, i.e. the money should be followed as far as possible to understand and account for the carbon impact in the real economy. It includes scope 1, 2 and relevant categories of scope 3 of the investee.
A global core team of 10 to 15 leading financial institutions will be set up to to develop the global carbon accounting standard and will present the first version in mid-2020. This version will be updated based on the lessons learned through its implementation at the regional level. The second version of the standard will be ready by mid-2022.
At the end of 2018, the group published their second report.
PCAF methodologies are being implemented in five regions: Africa, Asia-Pacific, Europe, Latin America and North America. Each region has regional implementation teams with a clear governance structure.
Each team is receiving technical assistance in implementing the PCAF methodologies (at no cost). The lessons learned through the regional implementation feed into the refinement of the global carbon accounting standard.
[…] the most comprehensive methodology that I’d read for the [financial] sector. The fact that it’s an industry-led development makes it well-placed to be used as a standard across the industry.
Leanne Bouvet, Senior Technical Manager, Financial Services CDP