The Partnership for Carbon Accounting Financials (PCAF) announced that it has launched a UK coalition, aimed at promoting the measurement and disclosure of the carbon emissions impact of the finance sector.
The new coalition is being initiated and chaired by the International business of Federated Hermes, and also includes initial members Triodos Bank UK, NatWest Group, Lloyds Banking Group, CDC Group, Investec plc, Ecology Building Society and Nationwide Building Society. It will focus on applying PCAF’s methodologies for measuring financed emissions in a UK context, sharing best practices, working on data quality improvements and performing research on further method development.
Giel Linthorst, Executive Director of PCAF Secretariat and Director at Guidehouse, said:
“The UK has always been a leader in the financial industry. I’m very pleased to see that this PCAF UK coalition is similarly taking a leading role as well. Stronger and national collaboration is crucial within PCAF to enable PCAF participants to improve their data quality and steer their portfolio in line with the Paris Agreement.”
The PCAF is a global collaboration of 77 financial institutions representing total financial assets of more than $13 trillion, with a mission to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. The organization has recently announced the addition of prominent members, including NatWest, Bank of America, Morgan Stanley, and Citi.
Earlier this summer, the PCAF publicly released its new standard for financial institutions to measure and disclose the greenhouse gas emissions impact of investments and loans. In addition to assessing and disclosing emissions data, the introduction of the standard is expected to enable financial institutions to better set climate targets and asses climate transition risks from their activities. The PCAF has opened a public consultation on the new standard, which will run through September 30, 2020, and the final version of the standard is expected to be released in November 2020.
Eoin Murray, Head of Investment at the International business of Federated Hermes, said:
“Enacting genuine change to the level of carbon emissions that we finance as an industry requires transparent and rigorous carbon accounting, the efficacy of which is only enhanced when public and private stakeholders are able to do so collaboratively. PCAF UK allows us to work as a collective towards a common goal, and we are delighted to be leading the UK coalition.”
Bevis Watts, CEO of Triodos Bank UK, said:
“As a founder of PCAF we are pleased to see it move towards becoming the industry standard. It is critical we find a common global methodology for reporting on financed emissions to ensure robust disclosure, to provide a platform for science-based target setting and a give clear choice in how people choose to save and invest their money.”
Mark Carney, as the Prime Minister’s Finance Adviser for COP26 (UN Climate Change Conference) and observer to PCAF, said:
“To achieve net zero we need a whole economy transition – every company, every bank, every insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them. For financial firms, that means reviewing more than the emissions generated by their own business activity. They must measure and report the emissions generated by the companies they invest in and lend to. PCAF’s work to standardise the approach to measuring financed emissions is an important step to ensuring that every financial decision takes climate change into account.”