Ahya’s Issue Brief offers a practical overview for financial institutions on how to measure and report financed emissions using the Partnership for Carbon Accounting Financials (PCAF) standard. It outlines the core principles, methodologies, and reporting expectations that form the foundation of credible climate accountability. The brief also addresses regional gaps in the MENAP’s financial sector and explains how institutions can apply PCAF’s guidance to quantify emissions across six key asset classes: Listed Equities and Corporate Bonds, Business Loans and Unlisted Equities, Project Finance, Commercial Real Estate, Mortgages, and Motor Vehicle Loans. By aligning with PCAF, institutions can meet disclosure expectations under frameworks like TCFD, CDP, and SBTi, while supporting global climate goals.
The Partnership for Carbon Accounting Financials (PCAF) is the global standard that empowers financial institutions to accurately measure, manage, and disclose GHG emissions tied to their lending and investment activities. Financial institutions, encompassing banks and investment funds, must manage their financed emissions (scope 3, category 15)—the primary source of their climate risk exposure—to adhere to changing regulatory requirements and market norms.
Ahya has engineered AI-driven software solutions to meet the critical demands of data acquisition, carbon management, and emissions accounting. Developed in accordance with PCAF methodologies, AhyaOS facilitates comprehensive financed emissions accounting. The platform seamlessly incorporates PCAF's six asset classes, enabling financial institutions to execute precise and uniform emissions accounting. To comprehensively assist these institutions, AhyaOS provides four integrated modules: Measurement, Analysis, Reduction, and Reporting.
(i) Our perspective on PCAF
Ahya views PCAF as essential for accurately measuring financed emissions—the largest source of climate impact for banks, fund managers, and development financial institutions. It enables institutions to manage climate risks, align with global standards, and maintain credibility. Non-adoption increases exposure to regulatory, financial, and reputational risks.
(II) Principles
The PCAF standard builds on GHG protocol principles, providing tailored guidance for financial institutions to assess financed emissions from lending, investment, and underwriting activities. It ensures completeness, consistency, relevance, accuracy, and transparency in measuring and disclosing emissions, helping align portfolios with climate goals.
(III) Methodology
To calculate financed emissions, financial institutions must align methodologies with the type of financing and asset class. The PCAF standard defines six key asset classes: listed equity & corporate bonds, business loans & unlisted equity, project finance, commercial real estate, mortgages, and motor vehicle loans. Each class has specific rules for emission scopes, attribution, calculation equations, and data requirements.
(IV) Reporting requirements and recommendations
Financial institutions must report emissions in line with frameworks like TCFD, GRI and GHG Protocol, with flexibility on reporting starting points and exclusions. They must disclose emissions using either operational or financial control approaches.
(V) Accelerate
Ahya provides AI-powered software for the net-zero era, offering sustainable innovation through simplified emissions measurement, reporting, and reduction. Our AI-driven climate solutions, including the AhyaOS carbon management and accounting platform with its Measure, Reduce, Analyze, and Report modules, and Tawazun, our AI-powered voluntary carbon marketplace for verified offsets, support sustainable economic growth and equitable climate action.
Ahya’s Issue Brief offers a practical overview for financial institutions on how to measure and report financed emissions using the Partnership for Carbon Accounting Financials (PCAF) standard. It outlines the core principles, methodologies, and reporting expectations that form the foundation of credible climate accountability. The brief also addresses regional gaps in the MENAP’s financial sector and explains how institutions can apply PCAF’s guidance to quantify emissions across six key asset classes: Listed Equities and Corporate Bonds, Business Loans and Unlisted Equities, Project Finance, Commercial Real Estate, Mortgages, and Motor Vehicle Loans. By aligning with PCAF, institutions can meet disclosure expectations under frameworks like TCFD, CDP, and SBTi, while supporting global climate goals.
