The Partnership for Carbon Accounting Financials (PCAF) announced today that Bank of America has joined its initiative to develop a common framework to assess financed emissions. Bank of America is the largest and most diversified global financial institution to participate in this collaboration. The company has been working with the PCAF Core Team over the last several months and will continue to be part of the Core Team, providing its financing and risk management expertise to support the development of a consistent methodology for assessing, measuring and disclosing greenhouse gas (GHG) emissions attributed to financing activities. The goal of PCAF is to develop a global accounting standard to be utilized by the financial sector, providing more transparency to stakeholders.
“As a global financial institution, and as an industry, we have a critical role to play in accelerating the transition to a low-carbon, more sustainable economy. By joining PCAF, we are helping to drive a consistent framework for institutions to measure financed emissions, as well as providing a useful tool in the management of these emissions, which is a critical component when addressing climate change,” said Anne Finucane, vice chairman at Bank of America. “We look forward to collaborating with other financial institutions and partners on this important effort.”
With nearly 70 banks and investors from five continents, PCAF’s member financial institutions represent more than $9 trillion (USD) in assets. Through this collaboration, the initiative will develop a consistent methodology for financed emissions, or the disclosure of GHG emissions in loans and investments made by firms in the financial sector. The initiative has been spearheaded by Dutch and North American banks and investment managers as a way to provide consistent transparency over financed emissions, and has now been taken up as a global initiative.
Beyond assessing and tracking climate impact, measuring emissions of loans and investments give financial institutions the information required to measure and manage the emissions in their portfolio with a consistent and harmonized approach. As such, the Global Carbon Accounting Standard feeds into the work of other climate initiatives, such as the financial sector disclosures of the Carbon Disclosure Project (CDP), Science Based Target initiative (SBTi) and the Task Force on Climate-related Financial Disclosures (TCFD).
“Measuring the carbon impact of loans and investments is a fundamental building block for further climate action,” said Ivan Frishberg of Amalgamated Bank and a member of the PCAF Steering Committee. “Counting carbon may seem like a purely technical thing, but we measure so that we can manage, and Bank of America is showing its seriousness in this work through its active collaboration with PCAF.”
The Partnership for Carbon Accounting Financials (PCAF), launched in 2019, currently consist of nearly 70 banks and investors have subscribed to the PCAF initiative. PCAF participants work together to jointly develop the Global Carbon Accounting Standard for the financial industry to measure and disclose the greenhouse emissions of their loans and investments. By doing so, PCAF participants take the first step required to assess climate-related risks, set targets in line with Paris Climate Agreement and develop effective strategies to decarbonize our society. For more information, see https://carbonaccountingfinancials.com.
At Bank of America, we’re guided by a common purpose to help make financial lives better, through the power of every connection. We’re delivering on this through responsible growth with a focus on our environmental, social and governance (ESG) leadership. ESG is embedded across our eight lines of business and reflects how we help fuel the global economy, build trust and credibility, and represent a company that people want to work for, invest in and do business with. It’s demonstrated in the inclusive and supportive workplace we create for our employees, the responsible products and services we offer our clients, and the impact we make around the world in helping local economies thrive. An important part of this work is forming strong partnerships with nonprofits and advocacy groups, such as community, consumer and environmental organizations, to bring together our collective networks and expertise to achieve greater impact.
Kelly Sapp, Bank of America
Angelica Afanador, Manager, PCAF Secretariat