// Sustainable & Green Finance

Financed Emissions & PCAF

Measure the emissions associated with your lending and investment on a methodology counterparties accept.

Financed emissions measurement following the PCAF Global GHG Accounting and Reporting Standard, with asset class coverage, data quality scoring and attribution.

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// Context

Why this matters

For a bank or investor, financed emissions are almost always the largest part of the greenhouse gas footprint. Operational emissions from offices and travel are immaterial by comparison.

The measurement problem is attribution: how much of a borrower's or investee's emissions is attributable to the finance provided. The PCAF standard sets out attribution factors and methodology by asset class, which is why it has become the common reference point.

The binding constraint is data. Few portfolios have reported emissions for most counterparties, so measurement relies on a mix of reported data, physical activity estimates and economic activity proxies -- each with a different reliability. PCAF handles this through a data quality score, which is disclosed alongside the result.

// The engagement

How CER helps

Asset class scoping across the lending and investment portfolio
Methodology selection by asset class under the PCAF standard
Attribution factor calculation
Counterparty data collection and mapping
Emissions estimation where reported data is unavailable
Data quality scoring by asset class and overall
Portfolio-level aggregation and intensity metrics
Data improvement roadmap to raise data quality over time
Integration with climate risk and target setting
Disclosure preparation

// Deliverables

What you receive

Financed emissions results by asset class
PCAF data quality scores
Attribution methodology documentation
Portfolio emissions intensity metrics
Counterparty data collection framework
Data quality improvement roadmap
Disclosure-ready results and methodology narrative

Frameworks and standards

PCAF Global GHG Accounting and Reporting Standard for the Financial Industry
GHG Protocol Corporate Value Chain (Scope 3) Standard

// Fit

Who this is for

Banks measuring emissions across lending portfolios
Asset managers and asset owners measuring portfolio emissions
Insurers measuring investment and underwriting associated emissions
Institutions preparing to set portfolio emissions targets

// Why CER

Practitioners, not report writers

CER works from Singapore with organisations across Asia, which matters for this service because requirements arriving from European regulators, regional supervisors and local listing rules do not align neatly.

Engagements run through to implementation: the data collection process, the documentation, the controls and the internal handover, so that the second cycle is cheaper than the first and can be run without us.

Where an organisation would be better served by building the capability internally, CER Academy delivers the same technical material as training.

Meet the people behind the work

// Our people

Expertise on this service

Raymond Cheung

Advisor & Lead Trainer

Over twenty years in actuarial science and risk management, working across ESG, sustainability and ESG investment.

Actuarial science · Risk management · ESG and sustainability

View Raymond Cheung’s profile

Chan Ee Chong

Lead Consultant

Over twenty years in wealth management and business consultancy, with ESG project experience across South-East Asia.

ESG advisory · Wealth management · Business consultancy

View Chan Ee Chong’s profile

// Questions

Frequently asked

What is PCAF?

The Partnership for Carbon Accounting Financials developed a global standard for measuring and disclosing the greenhouse gas emissions associated with loans and investments. It provides methodology and attribution factors by asset class, which is what makes results comparable between institutions.

What is a PCAF data quality score?

A score from 1 to 5 indicating the reliability of the underlying data, where 1 reflects verified reported emissions and 5 reflects estimation from economic activity data. It is disclosed with the result so users can judge how much weight the figure bears.

Our portfolio data is poor. Should we wait?

Generally no. Starting with a high proportion of score 4 and 5 data is normal, and the score is disclosed precisely so that this is transparent. Measuring establishes the baseline and shows where data improvement effort should go.

How does this relate to Scope 3?

Financed emissions sit in Scope 3 Category 15, investments. PCAF provides the detailed methodology the GHG Protocol does not, which is why financial institutions use both together.

Can financed emissions be used for target setting?

Yes, and that is a common reason for measuring them. Targets should account for data quality, since a baseline built largely on proxies will move as data improves rather than only as the portfolio changes.

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