Financed emissions are the greenhouse gas (GHG) emissions related to investments, loans, and financial services. Financed emissions make up the vast majority of GHG emissions in the banking sector. In fact, across all financial institutions, financed emissions constitute more than 99.5% of overall emissions on average. Until recent developments in voluntary and regulatory climate disclosures, banks have been hesitant to measure financed emissions because of the complexity and resources required. But with the sharp increase in stakeholder pressure to measure, report, and reduce emissions, banks have begun the process of assessing their climate-related risks and opportunities. Leading them to begin calculating the full scope of their emissions, including financed emissions.
The white paper reveals several key takeaways, including: