SUSTAINABLE FINANCE
The Partnership for Carbon Accounting Financials (PCAF) standard defines how financial institutions measure and disclose the greenhouse gas emissions associated with their loans, investments, and other financial activities. Financed emissions — the emissions generated by an institution's lending and investment portfolio — represent by far the largest share of a financial institution's climate footprint, and are the primary quantitative foundation for TCFD climate risk disclosure, IFRS S2 Scope 3 reporting, and CDP Financial Services questionnaire responses. For financial institutions facing investor pressure on climate alignment, regulatory climate risk requirements, or CDP scoring imperatives, PCAF-compliant financed emissions accounting is the measurement system those obligations depend on.
The central challenge in PCAF implementation is data quality. Most PCAF calculations rely on Tier 4 or Tier 5 sector-average emission intensity proxies — because counterparty-specific GHG data from borrowers is simply unavailable through conventional collection. The Semtrio and Carbondeck approach changes this directly: financial institutions can invite their customer base to Carbondeck, or request already-existing Carbondeck data from customers who use the platform — converting sector-average proxies into actual Tier 1 GHG emission data from counterparties, and delivering real-time portfolio emissions visibility and climate risk metrics directly into banking and portfolio management tools.
TCFD's financial sector supplemental guidance and IFRS S2 both require financial institutions to disclose Scope 3 Category 15 (Investments) emissions — the emissions associated with lending and investment portfolios. PCAF provides the standardized methodology for calculating these emissions across different asset classes: corporate loans, listed equity, project finance, real estate, mortgages, motor vehicle loans, and sovereign bonds. Without PCAF-aligned data, financial institutions cannot produce credible TCFD or IFRS S2 Scope 3 disclosures — nor can they set quantitative portfolio-level climate targets that hold up to investor and regulatory scrutiny.
CDP's Financial Services questionnaire explicitly requires financial institutions to report financed emissions in alignment with the PCAF standard — covering the asset classes most significant to the institution's portfolio. CDP scores financial sector organizations on the completeness, quality, and year-on-year comparability of their financed emissions data. Organizations that report financed emissions without PCAF methodology alignment, or that rely predominantly on Tier 4–5 sector-average data, consistently score lower on CDP's measurement and data quality questions — which are among the most heavily weighted sections for financial sector respondents.
The PCAF standard scores data quality on a five-tier scale: Tier 1 (actual verified GHG data from the counterparty) is the highest; Tier 5 (sector-average proxies without counterparty-specific data) is the lowest. Most financial institutions calculate the majority of their financed emissions at Tier 4 or Tier 5 — because borrower-specific GHG data is not available through conventional collection. The Carbondeck approach directly resolves this: by enabling financial institutions to access actual GHG data from counterparties who use the platform, or by inviting customers to report through Carbondeck, Tier 4–5 sector-average calculations are progressively replaced by Tier 1 actual emissions from counterparties — improving the precision, credibility, and risk-management utility of the financed emissions portfolio.
Most financial institutions approach PCAF implementation by assembling the best available data — which for the majority of corporate loan counterparties means applying sector-average emission intensity factors to revenue or balance sheet values. The resulting financed emissions figure is a reasonable estimate. It is not a measured portfolio. Investors, rating agencies, and regulators increasingly understand this distinction — and the data quality score that PCAF requires institutions to disclose alongside their financed emissions figure makes the difference transparent.
Semtrio's PCAF implementation approach addresses both levels of the problem simultaneously. At the methodology level, we establish the correct asset class scope, data collection architecture, emission factor selection, attribution factor calculations, and data quality scoring — producing a PCAF-compliant baseline that satisfies TCFD, IFRS S2, and CDP Financial Services requirements from year one. At the data quality level, Carbondeck provides the infrastructure to progressively replace sector-average Tier 4–5 data with actual Tier 1 GHG data from counterparties — either by inviting the institution's customer base to use Carbondeck for their own GHG accounting, or by accessing existing Carbondeck data from customers already on the platform. Real-time portfolio emissions, intensity metrics, and climate risk performance indicators then flow directly into the institution's banking and risk management tools.
OUR PROCESS
Full PCAF implementation — asset class scoping, data architecture, emission calculations, PCAF data quality scoring, and Carbondeck-powered Tier 1 data elevation.
From Tier 4 sector averages to Tier 1 actual counterparty data — real-time portfolio emissions intelligence integrated into your banking tools.
The most significant limitation in financed emissions accounting is not the PCAF methodology — it is the data quality problem. When a bank calculates the financed emissions of its corporate loan portfolio using sector-average emission intensity factors applied to borrower revenues, it produces a Tier 4 estimate. It does not know the actual GHG emissions of its counterparties. The disclosure it makes to investors, regulators, and CDP reflects the sector average for that industry — not the actual climate performance of the specific companies it has lent to. For banks with meaningful climate targets or CDP scoring obligations, this is not just a disclosure quality issue — it is a risk management and target-setting limitation. You cannot track whether your portfolio is decarbonizing when your data reflects the sector, not the borrowers.
Carbondeck resolves this by creating a direct data pipeline between financial institutions and their counterparties' actual GHG emission data. Financial institutions can invite their customer base to use Carbondeck for their own GHG accounting — and once customers complete their Carbondeck GHG inventory, the institution can access that data directly, replacing the Tier 4 sector-average estimate with the counterparty's actual Tier 1 emission figure. For customers already using Carbondeck, the bank can request existing verified data immediately — no new questionnaire, no data collection campaign, no re-collection. The more of the portfolio that uses Carbondeck, the more of the financed emissions calculation moves from sector-average estimates to actual measured emissions — improving data quality scores disclosed to investors and regulators, year on year.
As an accredited Climateware consulting partner, Semtrio configures and deploys Carbondeck for financial institutions as a core component of PCAF implementation. We establish the customer invitation programme, configure the data access workflows, and integrate Carbondeck's portfolio emissions output directly into the institution's banking and portfolio management tools — delivering real-time portfolio emissions, carbon intensity metrics, and climate risk and performance indicators continuously. The portfolio's financed emissions become a live risk intelligence asset, not an annual reporting exercise reconstructed at year-end.
Explore CarbondeckPCAF financed emissions sit within Scope 3 Category 15 (Investments) of the GHG Protocol — financial institutions integrating PCAF reporting into a consolidated Scope 3 GHG inventory produce the complete climate emissions picture that TCFD, IFRS S2, and CDP simultaneously require.
Learn moreThe SBTi Financial Institutions Science-Based Targets Guidance uses PCAF-aligned financed emissions as the baseline for financial sector science-based targets — institutions pursuing SBTi financial sector targets need PCAF data as the quantitative foundation for portfolio-level decarbonization commitments.
Learn moreIFRS S2 requires financial institutions to disclose Scope 3 financed emissions — PCAF provides the standard methodology for these calculations, making PCAF implementation and IFRS S2 financial sector disclosure a directly connected engagement. Semtrio designs both to draw from the same data architecture.
Learn moreCDP Financial Services questionnaire requires PCAF-aligned financed emissions disclosure — institutions reporting financed emissions with PCAF methodology and improving data quality scores year-on-year consistently achieve stronger CDP measurement scores on the sections most heavily weighted for financial sector respondents.
Learn morePCAF implementation built for TCFD, IFRS S2, and CDP — with Carbondeck delivering the Tier 1 counterparty data that makes the portfolio measurable, not estimated.
Semtrio's PCAF advisory is positioned at the intersection where financed emissions accounting connects to TCFD climate risk disclosure, IFRS S2 financial sector reporting, and CDP Financial Services scoring. We understand not just the PCAF methodology — asset class-specific approaches, attribution factor calculations, data quality scoring — but how PCAF data flows into the downstream frameworks financial institutions are managing simultaneously. PCAF data built solely for annual disclosure, without regard for CDP scoring requirements or IFRS S2 Scope 3 methodology alignment, creates downstream problems that are more expensive to remediate than to prevent.
The data quality dimension is where Semtrio's Carbondeck partnership creates the most significant differentiation. Most PCAF implementations produce Tier 4–5 estimates for the majority of the corporate lending portfolio — because actual counterparty GHG data is not available through conventional collection methods. Carbondeck changes the data availability equation: financial institutions can invite their customer base to Carbondeck or access existing Carbondeck data from customers already on the platform — progressively replacing sector-average proxies with Tier 1 actual GHG data across the portfolio. The result is a financed emissions calculation that becomes more accurate, more credible, and more useful as a portfolio risk management tool every year — not one that plateaus at Tier 4 because the conventional data ceiling has been reached.
Integration into banking and portfolio management tools delivers real-time portfolio emissions and climate risk metrics — turning financed emissions from an annual reporting output into a continuous portfolio intelligence asset that informs lending decisions, sector exposure management, and climate target tracking throughout the year.
Talk to our team about your PCAF implementationFinanced emissions implementation designed to serve every downstream disclosure framework from the same data architecture
Customer invitation programme + existing data requests — sector-average Tier 4–5 progressively replaced by actual counterparty GHG data
Portfolio emissions, intensity metrics, and climate risk indicators integrated into banking tools — continuously available, not rebuilt at year-end
Whether you're scoping a single service engagement, evaluating end-to-end advisory across multiple clusters, or looking for one accountable partner across strategy and disclosure — start here.
Yaren Ünal
Senior Specialist,Client Solutions
Hamza Söylemez
Specialist,Client Solutions
Frequently asked questions about financed emissions accounting (PCAF)
Whether you are implementing PCAF for the first time or improving an existing baseline for TCFD, IFRS S2, or CDP disclosure — we will scope the asset classes, design the data architecture, deploy Carbondeck counterparty data elevation, and produce disclosure-ready reporting.
Whether you are implementing PCAF for the first time or improving an existing baseline for TCFD, IFRS S2, or CDP disclosure — we will scope the asset classes, design the data architecture, deploy Carbondeck counterparty data elevation, and produce disclosure-ready reporting.
