About
PCAF was created in 2015 by Dutch financial institutions in response to the scale of the climate challenge and the crucial role the financial industry can play in facilitating the road to net zero carbon emissions. The initiative broke into North America in 2018, and scaled further up globally in 2019. The first Norwegian participant was Cultura Sparebank, joining in 2019. Large Norwegian institutions have followed, including, among others, DNB in 2022, Norges Bank Investment Management in 2023 and Export Finance Norway in 2024. PCAF surpassed 600 signatories globally in May 2025.
With the Standard, PCAF aims to enable financial institutions, such as commercial banks, investment banks, asset managers, and insurance companies, to set science-based targets and align their portfolio with the Paris Climate Agreement.
The Standard sets out methodological guidance for six asset classes: (i) listed equity and corporate bonds, (ii) business loans and unlisted equity, (iii) project finance, (iv) commercial real estate, (v) mortgages, and (vi) motor vehicle loans. The Standard also guides participants in selecting the appropriate asset class method. The methodologies themselves explain both what data is needed and the equations to be used to appropriately measure financed emissions from each relevant asset class.
In addition to the methodologies for calculating emissions, the Standard explains how the participants shall disclose the information. The Standard uses the words "shall" and "should" in relation to the different types of disclosures to distinguish between requirements and recommendations. Institutions meet the minimum required reporting threshold by complying with the required disclosures. All disclosures above this threshold are solely recommendations, but any disclosures not made must be accompanied by an explanation.
Who does it impact?
Financial institutions who voluntarily submit to the Standard's requirements.
Status: Launched
PCAF was created in 2015
Relation to other initiatives and regulations
The Standard is a stand-alone framework for the calculation and disclosure of financed emissions. It does, however, for practical reasons employ certain definitions commonly used elsewhere or that are expected to become market dominant. For example, the Standard uses the definition of enterprise value including cash (EVIC) set out by the EU Technical Expert Group on Sustainable Finance in its 2019 report on climate-related benchmarks.
Participants
Voluntary financial institutions world-wide. An overview of the registered members to the Standard can be found here.
Thommessen's comments
Financed greenhouse gas emissions are emissions stemming not from the financial institutions themselves, but from their loans and investments. These emissions can be difficult to measure due to factors such as limited data and the institutions remoteness to activities or projects they invest in. This often holds especially true for smaller investee companies or other minor investments.
The Standard is a tool for creating a harmonized accounting and reporting network to make it easier for the institutions to disclose information about their financed emissions, and in turn making such information more accessible, transparent and reliable to sustainability-oriented investors and other actors.
Reliable and complete emissions reporting is important for financial institutions, given the large amounts of capital they control. This capital gives them real power to influence the world's effort towards reaching the climate goals set out in the Paris Agreement and Glasgow Pact.
The Standard is the first globally accepted accounting standard for measuring and disclosing financed emissions. Joining the initiative and complying with the Standard are entirely voluntary actions taken by member institutions. The success of the PCAF and other industry-led climate initiatives in the sustainable finance sphere launched in recent years, such as the Green Bond Principles (GBP), illustrates that voluntary efforts may very well be effectful. The common aim of these standards is to create harmonized methodologies for measurement and reporting, ultimately improving the realm of sustainable finance and assisting in the world's shift towards more sustainable economic activity.
While we observe the potential positive impact of any standard that enhances the disclosure of sustainability information in the financial sector, we also acknowledge the increasing vastness of different standards, both voluntary and mandatory, that financial institutions and other market participants either need or want to adhere to. We also note that the number of participants is increasing, in line with an ever greater focus on ESG in finance in general. And while compliance with standards such as the PCAF's Standard involves increased costs for institutions, their joining such initiatives may be well justified. Participating institutions cite, among other benefits, accessibility to tools and methods for achieving climate goals as reasons for submitting themselves to the Standard. It is further reasonable to assume that the institutions view such membership as an important part of their marketing strategy.