Welcome back to our blog series on Banks, Borrowers, and Climate Change. Today we will be returning to the PCAF Global Accounting and Reporting Standard by taking a closer look at Part B: Facilitated Emissions and what it means for financial institutions and reporting requirements. Part B of the PCAF standard focuses on “facilitated emissions,” which are emissions associated with services provided by financial institutions in capital market transactions. These emissions are distinct from financed emissions, which are based on on-balance sheet exposure (e.g., loans and investments). The temporary nature of facilitated emissions means that financial institutions do not usually take on financial (credit) risk in facilitated transactions.

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