250 financial institutions commit to climate action

Our partner the Partnership for Carbon Accounting Financials (PCAF) has welcomed its 250^th signatory, representing a fourfold increase in its global participation.

The IKEA Foundation has been supporting PCAF to develop a global GHG-accounting standard for the financial industry since its global launch in September 2019. At that time, PCAF had 55 signatories, which collectively represented just under $4 trillion in total financial assets.

In just two and a half years, PCAF has increased its global participation to more than 250 financial institutions globally, far exceeding its initial target of 100. This milestone represents more than $70 trillion in total financial assets.

Paris Agreement

The PCAF Standard’s rapid adoption by financial institutions has made it the most widely used method for measuring and reporting financed emissions globally. These are greenhouse gas emissions that are financed by the loans and investments of banks and other financial institutions.

By providing financial institutions with a robust and transparent approach to measure financed emissions, PCAF is enabling the industry to account for and disclose these emissions. This is the first step towards making the flow of money consistent with the goals of the Paris Agreement to limit global temperature increase to 1.5⁰C.

Emission reduction steps

Nando van Kleeff, Programme Manager for Climate Action at the IKEA Foundation, says: “We can only achieve an orderly energy transition if there is sufficient investment in low-emission technologies. Banks and investors need to measure the carbon intensity of their investments and the PCAF Standard helps with this. We are excited to see the uptake by global financial institutions and the recognition of the PCAF Standard by the Task Force on Climate-Related Financial Disclosures and SEC, among others.”

Nando adds: “We’re partnering with PCAF because we believe that enabling financial institutions to measure their financed emissions will lead them to discuss GHG reduction steps with the companies they invest in and the clients they lend to, reducing the climate impact of their portfolios.”

PCAF has achieved its goal of growing to over 250 participating financial institutions. It has set its sights on continuing to build its global network and supporting signatories to achieve high-quality disclosures of financed emissions.