The Partnership for Carbon Accounting Financials (PCAF) was launched globally in 2019. Currently, more than 120 banks and investors have subscribed to the PCAF initiative. PCAF participants jointly develop the Global GHG Accounting and Reporting Standard for the Financial Industry to measure and disclose the greenhouse gas emissions of their loans and investments. Developed by financial institutions themselves, the methodology has become a global standard with more than 140 financial institutions with assets of USD 40 trillion using it – from small, values-based banks to some of the world’s largest financial institutions.
The Global Alliance for Banking on Values is a constituent member of the PCAF initiative and sits on the Steering Committee. In addition, GABV members are active in the working groups coordinated by the PCAF Secretariat to develop and/or adapt existing carbon accounting methodologies for global application.
How the GABV contributed to globalizing the PCAF initiative
The Global Alliance for Banking on Values banks played a crucial role in the PCAF story. In 2019, at the GABV’s 10th-anniversary meeting in Vancouver, 28 banks signed the GABV’s Climate Change Commitment, agreeing to assess and disclose their financed emissions within three years. This signaled that banks from very different parts of the world believed the PCAF methodology could be applied to their business. Almost all the signatories to this Commitment are participants in PCAF.
In 2020 the Commitment helped to contribute to a systemic change in the banking sector. That, and the development of a North American Chapter led by GABV member Amalgamated Bank, was crucial as a catalyst for the launch of PCAF as an international programme. With the support of progressive funders like the Hewlett and IKEA Foundations, the PCAF global programme was born. Since then a secretariat, run by consultancy Guidehouse, has lead rapid expansion of PCAF around the world. Among other things the programme:
- Provides practical support for banks using the PCAF methodology, including one-to-one technical advice as well as workshops for banks in the same region to share best practice
- Proactively works to expand the number of banks using PCAF
- Established a database providing emission factors, making it straightforward for institutions to get started with assessing and disclosing their financed emissions.
Values-based banks, and the GABV itself, are active participants in all these efforts. A member of the GABV secretariat sits on the global PCAF steerco, together with representatives from NMB Bank (Nepal), Amalgamated Bank (US) and Triodos Bank (Europe).
The PCAF programme has targeted at least 250 financial institutions to have adopted the PCAF methodology by the end of 2022. But ultimately we believe all institutions should assess and disclose their emissions so that they can take informed steps, and monitor their progress, on the journey to a low carbon future.
PCAF is a powerful example of how values-based banks can collaborate to play an important role in translating a values-driven agenda into positive, systemic change. And it could hardly be more urgent, because this is the decade when real change needs to happen.
Image by Johannes Plenio