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    PCAFPartnership for Carbon Accounting Financials

    Definition

    Partnership for Carbon Accounting Financials — global framework for financial institutions to measure and disclose financed emissions across asset classes.

    Editorial definition: The QHSE Standard, updated 3 October 2026 · https://qhsetech.com/glossary/pcaf

    Scope: The standard has separate parts and editions for financed, facilitated and insurance-associated emissions; name the part and edition used.

    Sources checked: . Examples are editorial illustrations.

    How the PCAF standard accounts for financed emissions

    The standard describes the Partnership for Carbon Accounting Financials as an industry-led initiative created in 2015 to harmonise greenhouse gas accounting and reporting across the financial sector. The standard it publishes for the sector, the Global GHG Accounting and Reporting Standard for the Financial Industry, has three parts: Part A on financed emissions, Part B on facilitated emissions and Part C on insurance-associated emissions. Part A is written for financial institutions measuring Scope 3 Category 15 emissions. Its third edition, dated December 2025, covers ten asset classes, up from the six of the 2020 edition. It adds methods for use of proceeds structures, securitisations, structured products and sub-sovereign debt, plus an optional way to report undrawn loans under IFRS, together with two reporting recommendations, a fluctuation analysis and an inflation adjustment. The PCAF page also shows a second edition of Part C dated 2025.

    The method rests on attribution. Financed emissions are always the borrower's or investee's emissions multiplied by an attribution factor that is specific to the asset class. The factor is the share of the borrower's or investee's annual emissions allocated to the loan or investment, found by dividing the institution's outstanding amount by the value of the company, project or asset. For a listed company that value is its enterprise value including cash. Part A says institutions shall disclose absolute financed emissions and follow its requirements on method, calculation, timeframe and data quality. It sets a data quality hierarchy and asks institutions to use the highest quality data available, while noting that even estimated or proxy data can show where emissions are concentrated. Optional supplemental guidance covers financed avoided emissions and forward-looking metrics, which sit outside the core inventory.

    PCAF describes its standard as a set of guidelines, so it does not by itself make a disclosure mandatory. The first edition, of November 2020, was reviewed by the GHG Protocol and found to conform to the Scope 3 Standard for Category 15 for six asset classes. The GHG Protocol has since closed its review service, so the 2023 additions and the methods new in December 2025 have not been reviewed by it. The ISSB's December 2025 amendments to IFRS S2 clarify that an entity may limit Scope 3 Category 15 disclosure to financed emissions as that standard defines them, so an institution that reports under both would record how its PCAF inventory maps to that definition. This page gives general information on the method and is not advice on a disclosure duty.

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    What a financed emissions record holds in software

    • The asset class of each exposure and the part and edition of the standard whose method was applied.
    • The outstanding amount and the date and currency it is measured in.
    • The denominator used for each exposure, such as enterprise value including cash, with its date and source.
    • The borrower's or investee's emissions: scope coverage, reporting year and whether reported, verified, estimated or proxy.
    • The data quality score from the asset class scorecard, and how data quality is improved over time.
    • Absolute financed emissions by asset class and any intensity metrics derived, with the denominator.
    • The fluctuation analysis explaining change between periods.

    Financed, facilitated and insurance-associated emissions

    The standard has three parts with their own methods and editions. Part A covers financed emissions, Part B facilitated emissions and Part C insurance-associated emissions. A figure should name the part and edition it comes from, and numbers from different parts should not be added together without a stated reason.

    A hypothetical example: attributing a listed holding

    The bank in this case is invented, and the case describes no real company. A bank holds EUR 20 million of a listed company's bonds and shares at year end. The company's enterprise value including cash is EUR 2,000 million, so the attribution factor is 20 divided by 2,000, or 1 per cent. The company reports 500,000 tonnes of carbon dioxide equivalent, so the bank's financed emissions for this holding are 5,000 tonnes. The record shows the amount, the denominator, the emissions figure with its source and the data quality score.

    In the next year the company's enterprise value falls to EUR 1,600 million while the bank's holding is unchanged. The attribution factor rises to 1.25 per cent, since 20 divided by 1,600 is 0.0125, so at the same company emissions the financed emissions rise to 6,250 tonnes. The bank's fluctuation analysis explains that the rise comes from the denominator, not from any change in the company's own emissions.

    Common misunderstandings about PCAF

    • Financed emissions are not an institution's own Scope 1 and 2. They are Scope 3 Category 15, and the standard asks institutions to report their own Scope 1 and 2 as well.
    • Estimated data is not forbidden. The standard says even estimated or proxy data can help, and the data quality score shows how far to trust a figure.
    • The denominator is not the size of the loan. The outstanding amount is the numerator, and the denominator is the value of the company, project or asset.
    • Using PCAF does not mean the GHG Protocol has reviewed the latest methods. Its review service has closed.
    • A year-on-year rise is not always a change in the borrower. The denominator can move on its own.

    How PCAF relates to other glossary terms

    PCAF applies value-chain accounting to the financial sector.

    • Scope 3 emissions: the category structure in which financed emissions form Category 15.
    • GHG Protocol: the accounting standards PCAF methods build on.
    • IFRS S1/S2: IFRS S2 has financed emissions requirements, amended in December 2025.
    • Net zero: portfolio targets need a baseline inventory, which a financed emissions figure can supply.

    Records and evidence that usually exist for financed emissions

    • Loan and investment ledgers with balances at the reporting date.
    • Valuation or enterprise value data from the stated source.
    • Borrower and investee emissions reports, or data provider extracts with their dates.
    • The calculation workbook or system output for each asset class.
    • Data quality scores and the plan to improve them.
    • The edition of the standard used and the optional disclosure checklist, if completed.

    What a software tool needs to capture for financed emissions

    • Holdings and loan data imported with a date and a mapping to the standard's asset classes.
    • The denominator held with source and date for each exposure.
    • Borrower emissions with provenance and a data quality score.
    • Edition handling that keeps the method used for each period.
    • A fluctuation view that separates changes in the amount, the denominator and the emissions.
    • Treatment of estimates and proxies that is visible in the output.
    • An export of absolute and intensity figures with the method statement.

    Catalog profiles documenting Scope 3 emissions calculation

    Profiles are listed because their record documents a Scope 3 calculation capability. That does not show that a product follows the PCAF asset class methods or holds the data a financial institution needs.

    Same rule for every product: tagged “Carbon Accounting”, “Carbon Management”, “Scope 3” or “Emissions Reporting”, with a sourced Scope 3 or supplier-emissions capability in its record, or one the vendor stated to us, labelled as vendor-stated. Documented and conditional capabilities qualify; check the linked scope before treating a module as included.

    Tekmon pays for a sponsored placement (above); its place in this list follows the same rule as every entry. How lists are ordered

    All 12 matching profiles are shown. Documentation review, not hands-on testing or a claim of compliance.

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    Frequently asked questions

    What does the PCAF standard cover?

    The standard it publishes for the sector, the Global GHG Accounting and Reporting Standard for the Financial Industry, has three parts: financed emissions (Part A), facilitated emissions (Part B) and insurance-associated emissions (Part C). The third edition of Part A, dated December 2025, covers ten asset classes.

    How are financed emissions calculated?

    Part A multiplies the emissions of the borrower or investee by an attribution factor that is specific to the asset class. The factor is the institution's outstanding amount divided by the value of the company, project or asset.

    Is PCAF the same as the GHG Protocol?

    No. PCAF is a separate initiative whose methods build on the GHG Protocol standards and add detail for each asset class. The GHG Protocol reviewed the first edition only, because it has since closed its review service.

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