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.
Led by Federated Hermes’ international business, and following a collaborative structure first created in the Netherlands, PCAF participants in the UK will enhance their cooperation on carbon accounting.
In addition to Federated Hermes International, other coalition members include: Triodos Bank UK, NatWest Group, Lloyds Banking Group, CDC Group, Investec, Ecology Building Society and Nationwide Building Society.
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, it announced.
Giel Linthorst, executive director of PCAF 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.
He added that a “stronger and national collaboration is crucial” within PCAF to enable its participants to improve their data quality and steer their portfolio in line with the Paris Climate Agreement.
Mark Carney, as the Prime Minister’s finance adviser for COP26 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.”
He noted that 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,” he added.
“They must measure and report the emissions generated by the companies they invest in and lend to”
Mark Carney, observer to PCAF
PCAF continues to expand, having grown from its initial 50 financial institutions as members with over $3trn (€2.5trn) in assets at the global launch last September, to its current 77 members with over $13trn in assets. The group is rapidly expanding across North America, Latin America, Europe, Africa and Asia-Pacific.
Eoin Murray, head of investment, international, at 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.”
The open-access, free-of-charge PCAF initiative allows banks and investors all across the world to assess the greenhouse gas emissions of their portfolios on the path to aligning their business strategies with the Paris Climate Agreement.