PCAF Initiates Public Consultation on Enhanced GHG Accounting Methodologies

UTRECHT, Netherlands, December 4, ​2024 – The Carbon Accounting Association (PCAF) announced the start ​of a ​public ​consultation to improve and expand its Global Accounting and Reporting Standards for the Financial Industry. ​This initiative aims to incorporate new methods that ​take into account new financial instruments and changing market practices.

Expanding GHG accounting coverage

Since its inception, CPHA has provided financial institutions with standardized methods to ​measure and disclose ​GHG emissions associated with various asset categories. The current ​consultation aims ​to expand this framework by introducing methods ​for additional financial activities, which will improve GHG accounting across the financial sector.

Main ​areas of methodological development

The consultation covers several critical areas:

• Transition Finance and Green Finance: Developing accounting methods that accurately reflect the GHG impacts of financing activities aimed at supporting the ​transition to a low-carbon economy.
• Fluctuations in GHG Inventory: Addressing changes in absolute GHG inventories resulting from variations in financial attribution metrics, such as Enterprise Value Including Cash (EVIC).
• Insurance Products: Expanding methodologies to cover additional insurance products, thereby capturing ​a broader spectrum of insurance-associated emissions.
• Securitized ​and Structured Products: Creating accounting ​approaches for complex financial instruments to ensure their GHG emissions are appropriately measured and ​reported.

Stakeholder participation in the consultation process

CPHA ​emphasizes the importance of ​stakeholder participation in this ​process. Financial institutions, industry experts, ​policymakers and civil society ​organizations are invited to provide information on the proposed methodologies. This ​collaborative ​approach ensures that the standards developed ​are sound, practical and widely accepted.

Calendar and participation

The public consultation is ​open until 28 February 2025. ​Stakeholders can access the draft methodologies and submit their comments through CPHA’s formal ​channels. After the consultation period, CPHA will review the comments received and incorporate them into the final versions of the methodologies, which are expected to be released later in 2025.

By expanding and refining its ​GHG accounting and reporting ​standards, CPHA continues to play a key role in enabling the financial sector to assess and disseminate the environmental impact of its portfolios. This initiative not only ​promotes transparency, but also supports the global transition to a low-carbon and sustainable economy.