PCAF Updates Global Standard for GHG Accounting

Highlights

• Updated PCAF Standard has new financed emissions and insurance-associated emissions methodologies.
• Banks and insurers get expanded tools for GHG accounting linked to loans, investments, and insurance products.
• New supplemental guidance covers financed avoided emissions and forward-looking metrics for future climate impact analysis.

The launch of the updated PCAF Standard indicates a major step for financial institutions that track greenhouse gas emissions, particularly financed emissions and insurance-associated emissions.

The revision arrives at a time when banks, insurers and investors face rising scrutiny over the climate effects linked to their portfolios.

Through the updated framework, institutions gain a stronger foundation for consistent GHG accounting, with new methodologies, supplemental guidance, and a wider scope that helps them interpret emissions tied to multiple financial activities.

Read More: Understanding Carbon Accounting: A Practical Guide for 2025

Expanded Financed Emissions Methods in the Updated PCAF Standard

The updated Global GHG Accounting and Reporting Standard introduces four new financed emissions methodologies connected to use-of-proceeds structures, securitisations and structured products, sub-sovereign debt, and undrawn loan commitments referenced under IFRS S1 and S2.

According to PCAF, these additions respond to gaps that previously made parts of institutional portfolios difficult to measure.

The revision keeps earlier methodologies intact yet pushes financial institutions to widen their measurement of Scope 3 Category 15 emissions through more consistent treatment of different instruments.

Also Read: PCAF Expands GHG Accounting and Reporting Framework

Insurance-Associated Emissions and Forward-Looking Metrics

The update expands into the insurance sector through two new insurance-associated emissions methodologies for treaty reinsurance and project insurance.

In tandem, PCAF releases supplemental guidance on financed avoided emissions and forward-looking metrics, which helps institutions interpret future climate impact without depending solely on historical emissions data.

This guidance sits within a broader industry trend that views GHG transparency as central to decision-making by insurers, asset managers and lenders.

Global Expert Input and Industry Alignment

Development of the updated Standard followed extensive input from industry-led working groups with more than 100 experts from the global PCAF signatory community. Their involvement helped build a framework that accounts for varied portfolios and financial instruments.

PCAF’s Core Team supervised the process, with representatives noting that the expanded methods encourage institutions to form a more complete view of emissions linked to their activities and related risks.

What the Updated PCAF Standard Means for Institutions

The updated PCAF GHG Accounting Standard serves as a significant tool for banks, investors, and insurers seeking stronger transparency around financed emissions and insurance-associated emissions.

Institutions may begin to apply the methods now, although many will adjust their systems over time.

See Also: Carbon & Emissions Accounting: Tracking, Reporting, and Software

Through this updated framework, PCAF firms up its role as a global standard-setter for financial sector GHG accounting, with an expanded suite of methodologies that help institutions explain their emissions exposure with far greater clarity.

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