PCAF provides a standardised approach for financial institutions to measure and report greenhouse-gas emissions associated with financial activities. Its Global GHG Accounting and Reporting Standard includes Part A for financed emissions, while the 2025 third edition expands the methodologies available to financial institutions.
Three concepts to understand
- Attribution: a financial institution attributes an appropriate share of a borrower or investee's emissions to its financing or investment.
- Data quality: PCAF uses asset-class-specific data-quality scoring from 1 to 5; better underlying emissions/activity data improves the reliability of the calculation.
- Disclosure: PCAF requires disclosure of absolute financed emissions and supporting information on methodology, calculations, timeframes and data quality.
For IFRS S2 reporting, Scope 3 measurement is connected to the GHG Protocol framework, including Category 15 investment activities where applicable. The precise disclosure required depends on the reporting entity's facts, materiality and applicable requirements.
Verified sources: PCAF — Global GHG Accounting and Reporting Standard · IFRS Foundation — IFRS S2