Carbon Accounting Essentials
Financed Emissions Fundamentals

A Brief Overview

May 28, 2024
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What is PCAF?

The Partnership for Carbon Accounting Financials, also known as PCAF, is a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. These are known as financed emissions.

Financed Emissions

Financed emissions are GHG emissions that are indirectly generated as a result of investments and loans. The GHG Protocol categorizes financed emissions as "investments" in scope 3, category 15.

An oil derrick at nighttime with the moon rising in the background

For example

When an investor finances an oil and gas company, they are indirectly supporting that company's operations and subsequent emissions.

As of August 2022, over 300 financial institutions have committed to measure and disclose their emissions in accordance with PCAF's Standard, totaling an estimated $79 trillion in total assets.


PCAF was initially created in 2015 by a group of Dutch financial institutions. The initiative expanded to North America in 2018, and then went global in 2019.

The Standard

PCAF developed the Global GHG Accounting and Reporting Standard for the Financial Industry — or simply “the Standard”. This was done to help financial institutions disclose emissions generated by their investments and loans.

Prior to this, financial institutions only had broad guidance from scope 3, category 15 of the GHG Protocol, or GHGP. PCAF builds on and supplements the GHGP. It is worth noting that no other scope 3 category is as material to a financial institution, as category 15 — their financed emissions.

Measuring and disclosing emissions is the first step in the global effort to cap global warming at 1.5°C — in line with the Paris Agreement.

Financed Emissions

Financed emissions make up a significant portion of emissions for financial institutions. By following PCAF’s framework, institutions can do their part in helping the globe reach net-zero.


PCAF’s mission is to promote the financial industry’s alignment with the Paris Agreement.

Improving financed emissions disclosure is a critical step for the financial industry — as measuring and transparently reporting these emissions helps financial institutions and their stakeholders understand the climate impact of the organization’s lending and investment activities.

That being said...

These types of emissions are difficult to measure.

The reporting institution must collect data from a variety of other businesses and organizations — many of which may not be actively measuring their carbon footprint.

Up Next
PCAF Asset Classes
Learn about PCAF's six asset classes for measuring and disclosing financed emissions.