New asset classes have been added in the report and new tools are available for the growing number of financial companies who want to use the PCAF methodology.Participating institutions in the Netherlands now represent €2 trillion of assets under management, many of whom already publicly disclose their associated carbon footprint.
The Dutch group pioneered the development of a methodology to assess the carbon emissions of financial institution’s loans and investments. This groundbreaking approach has been the catalyst for a global movement of institutions that assess their emissions with a view, ultimately, to align their impact with the Paris Climate Goals.
Triodos Bank’s Spanish Managing Director, Mikel Garcia, and FMO Jorim Schraven, Director of Impact and ESG at Dutch development bank, FMO,presented the report, Accounting CHG emissions and taking action: harmonized approach for the financial sector in the Netherlands, to Marcel Beukeboom, Climate Emissary of the Dutch government during the climate summit in Madrid.
Aligning portfolios with the Paris climate agreement
PCAF plays an important role in allowing the financial sector to make the transition to a positive, low carbon future. By making their CO2 emissions transparent, financial companies are taking a very important step to ultimately align their portfolio with the Paris Climate Agreement.
Jellie Banga, Chief Operating Officer at Triodos Bank: “The PCAF initiative helps us to understand the carbon footprint of our loans and investments so we can monitor portfolios over time and steer on the basis of credible data. We used the methodology extensively in our 2018 reporting and are building on this work in 2019.
We believe PCAF can play an important role helping to change finance and shift the industry so it’s fit for a positive, low carbon future. It’s time for carbon accounting to become business as usual in financial institutions. PCAF provides an easy way to get started, regardless of the size or location of your organisation. We urge others to take the opportunity that PCAF presents, to share your learning from doing so and together we can play our part in the urgent effort to transition to a sustainable, low carbon future.”
A global movement
PCAF started in the Netherlands in 2015 when ASN Bank took this initiative during the climate summit in Paris. Eleven Dutch financial institutions joined what remains the first effort of its kind by the financial industry, for the financial industry. PCAF has now become a worldwide standard. To date, 57 financial institutions from around the world have joined and committed to measure and report on their CO2 emissions. Together, they represent $3.5 trillion in total assets.
The ambition of PCAF is to grow this number to 100 institutions worldwide within three years. In the future, the group believes that measuring and disclosing CO2 impact should become common practice across the entire financial sector.
An important next step in the development of PCAF is to use insights from assessing greenhouse gas emissions to set science-based targets. These targets will help ensure financial institutions play their part in keeping the global increase in temperature within safe levels.