Disclosure Frameworks

Partnership for Carbon Accounting Financials (PCAF)

PCAF's work is fundamental to understanding and managing the climate impact of financial institutions, leading to more informed decision-making and strategies for achieving environmental sustainability goals. Learn more about what it is and how it can benefit your organization with Minimum. 

What is Partnership for Carbon Accounting Financials (PCAF)?

The Partnership for Carbon Accounting Financials (PCAF) is an initiative that enables financial institutions to assess and disclose the greenhouse gas (GHG) emissions associated with their financial activities. It was initiated by a group of Dutch financial institutions in 2015. 

These institutions that created PCAF recognized the need for a standardized approach to measure and report greenhouse gas (GHG) emissions associated with loans and investments specifically. The necessity of PCAF arose from a growing awareness within the financial industry about the impact of financial activities on climate change - to choose an example, this could be a pension fund that invests in the oil industry. 

The need was also recognised for the following reasons: 

  • Lack of standardization - before PCAF, there was no standardized methodology for financial institutions to measure and disclose their GHG emissions. However, PCAF is built on the foundations of the GHG Protocol,  and is widely considered to entail specific guidance that the GHG Protocol doesn't cover adequately.
  • Alignment with global climate goals - the creation of PCAF aligned with other international efforts to combat climate change, such as the Paris Agreement
  • Demand for transparency and accountability - there was a growing demand from stakeholders, including investors, regulators, and the public, for greater transparency and accountability regarding the environmental impact of financial institutions.

What’s the difference between Taskforce for Climate-related Financial Disclosures and PCAF?

The Task Force on Climate-related Financial Disclosures (TCFD) and the Partnership for Carbon Accounting Financials (PCAF) are similar, in that they’re both initiatives designed to standardize climate-related information in the financial sector. They are complementary, however it’s important to note that they have very distinct roles.

Task Force on Climate-related Financial Disclosures (TCFD)

TCFD was established by the Financial Stability Board (FSB) in 2015, and it was created to develop consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders.

TCFD concentrates on the disclosure of climate-related financial risks and opportunities - essentially its framework helps organizations disclose how climate change might impact their financial performance. On the flipside, PCAF is specifically centered on the measurement and disclosure of financed emissions - the greenhouse gas emissions that are indirectly financed by loans, investments, and other financial activities of institutions.

To summarise, the key difference is that TCFD provides guidelines for a wide range of organizations (including non-financial companies), where PCAF was developed especially for financed institutions. 

Find out more about the Task Force for Climate-related Financial Dsiclosures.

How does PCAF align with other reporting initiatives

Beyond the TCFD, the Partnership for Carbon Accounting Financials (PCAF) aligns with other reporting initiatives in several ways, enhancing the coherence and efficiency of sustainability reporting for financial institutions:

Science-Based Targets initiative (SBTi)

Institutions using PCAF's methodology can set science-based targets for reducing GHG emissions. PCAF helps quantify the emissions linked to their investment and lending portfolios.

Learn more about the Science-Based Targets initiative

Carbon Disclosure Project (CDP)

PCAF aligns with the CDP’s framework, which focuses on disclosing environmental impact, including GHG emissions. Financial institutions can use PCAF's standardized approach for calculating financed emissions as part of their CDP reporting.

Learn more about the Carbon Disclosure Project

Global Reporting Initiative (GRI)

PCAF’s focus on financed emissions adds depth to the broader sustainability reporting guidelines provided by GRI. Institutions can integrate PCAF data into their GRI reports to provide a more comprehensive view of their environmental impact.

UN Principles for Responsible Investment (PRI)

PCAF supports the principles of responsible investment by providing a tool to measure and disclose the emissions associated with investment portfolios, thereby aiding investors in making informed decisions aligned with environmental sustainability.

Learn more about UN PRI

EU Taxonomy and Sustainable Finance Disclosure Regulation (SFDR)

PCAF's methodology can aid institutions in meeting the requirements of the EU Taxonomy and SFDR by providing a clear and standardized way to report on the sustainability characteristics of financial products.

Learn more about the Sustainable Finance Disclosure Regulation (SFDR)

By aligning with these initiatives, PCAF ensures that its methodology is compatible with and enhances other leading sustainability reporting frameworks. This alignment helps financial institutions to streamline their reporting processes, avoid duplication of effort, and provide stakeholders with clear, comprehensive, and comparable data on their climate impact.

Impact of PCAF

Long term, PCAF helps financial organizations  to integrate climate considerations into their business models, leading to more sustainable and resilient practices aligned with global efforts to combat climate change. The end goal is a positive one - but in the short term, meeting the expectations of PCAF can mean that financial institutions need to address their business practices and decision-making in their investment portfolios. 


PCAF encourages banks to assess and manage the climate impact of their portfolios. This might lead to a shift in investment practices, focusing more on sustainable and low-emission projects, which could be a significant change for banks heavily invested in high-emission industries. Of course, this is crucial in the ambition to meet the 1.5˚C temperature target, but it will have a short term impact on banks.

With the need to disclose financed emissions, banks may require accurate carbon footprint data from their borrowers. This could potentially add complexity to the loan evaluation process, as banks might have to consider the borrower's carbon footprint, sustainability claims, and climate risks associated with the loan.


The implementation of standards in the insurance sector has been largely positive, focusing on enabling insurers to measure and report their insurance-associated emissions. However, there are some challenges and potential negative aspects, such as the increased data requirements and complexity oin implementation.

It’s also worth noting that as it currently stands, it has some significant gaps. It does not yet cover several key business lines, such as reinsurance, life and health insurance, household insurance, and other personal lines. While PCAF has indicated that these areas might be included in future updates, the current exclusions could limit the standard's comprehensiveness and effectiveness for some insurers.

Asset management

While there are many positives in using PCAF frameworks in asset management decisions, the focus on carbon accounting could potentially limit investment opportunities. As an example, asset managers might be inclined to divest from or avoid sectors with high emissions, which could impact the diversity and potential profitability of their portfolios. 

Additionally, the need to accurately calculate the carbon footprint of diverse investment portfolios can be complex. As a result, this complexity might pose difficulties, especially for smaller asset management firms with limited resources.

Benefits of joining PCAF

There are several benefits for financial institutions that choose to join the Partnership for Carbon Accounting Financials (PCAF). Firstly, it enables improved emission assessment and reporting through its standardized methodology for measuring and disclosing the greenhouse gas (GHG) emissions associated with loans and investments. This enables institutions to more accurately quantify their climate impact than they might otherise without it. Other benefits in organizations becoming a part of PCAF include: 

  • Risk management - Understanding the carbon footprint of their portfolios helps institutions identify and manage climate-related risks. This is increasingly important as climate change becomes a significant factor in financial stability.
  • Enhanced stakeholder trust and transparency - By measuring and disclosing financed emissions, institutions can increase transparency and build trust with stakeholders, including investors, customers, and regulatory bodies.
  • Innovative financial products - The knowledge gained through PCAF can inspire the development of innovative financial products and services that support a transition to a low-carbon, sustainable economy.
  • Collaboration and knowledge sharing - PCAF members become part of a collaborative network of financial institutions globally, allowing for sharing of best practices, experiences, and knowledge in climate accounting and sustainability.
  • Leadership and reputation - By actively participating in climate action and sustainable practices, institutions can enhance their reputation as leaders in sustainability and corporate responsibility.
  • Market opportunities - Understanding the carbon impact of investments can reveal new market opportunities in green and sustainable finance, which is a rapidly growing sector.

How Minimum can help

Minimum can help organizations to understand their existing carbon output, and create plans to mitigate climate related risks in the future.  Our Emissions Data Platform seamlessly collects and processes emissions data from every corner of your organization and supply chain - no matter the format. Making it the ideal platform for emissions audits and all-round business intelligence. 

Learn more about how Minimum's Emission Data Platform can help to power you all the way to Net Zero today.