Partnership for Carbon Accounting Financials (PCAF) launches UK coalition
17 Sep 2020
The Partnership for Carbon Accounting Financials (PCAF), an industry-led partnership to standardize carbon accounting for the financial sector, has launched a UK coalition to further promote measurement and disclosure of carbon emissions in the finance sector. Initiated and chaired by the International business of Federated Hermes, and following a collaborative structure first created in the Netherlands, PCAF participants in the UK will enhance their cooperation on carbon accounting by forming this coalition.
The PCAF UK coalition 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.”
Mark Carney, as the Prime Minister’s Finance Adviser for COP26 (UN Climate Change Conference) and observer to PCAF: “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."
With this new chapter in the PCAF structure, PCAF continues to expand. From 50 financial institutions with over 3 trillion USD in assets at the global launch last September, the initiative now holds 77 financial institutions with over 13 trillion USD in assets. The group is rapidly expanding across North America, Latin America, Europe, Africa and Asia-Pacific.
Eoin Murray, Head of Investment at the International business of Federated Hermes, says: “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.”
The open-access, free-of-charge PCAF initiative allows banks and investors all across the world to assess the GHG emissions of their portfolios on the path to aligning their business strategies with the Paris Climate Agreement.
Since its founding at the 2015 Paris Climate Summit, PCAF institutions have worked together to jointly develop open-source methodologies to measure the financed emissions of their loans and investments. Since 2018, PCAF institutions have quantified the emissions impact associated with these assets for a total of $1.5 trillion USD.