Facilitated emissions – top tips for finance teams of financial institutions
Why set a facilitated emissions baseline?
Capital markets play an essential role in the transition to net zero through allocating capital to emissions reduction and climate-resilient investments. Facilitators – such as bookrunners and managers – play a significant role in this process.
Facilitated emissions are a type of scope 3 emissions under category 15 of the GHG Protocol. If a financial institution undertakes significant facilitation activities, the reduction of these emissions will be crucial to the success of its net zero plans. Calculating a baseline is an important step to be able to measure progress towards this goal.
Without measuring facilitated emissions, decision makers will not have access to the information needed to shape their transition plans and meet targets. Further, regulation in relation to the disclosure of scope 3 emissions is growing and financial institutions are increasingly being scrutinised for their action, or inaction, on net zero.
How do you calculate a facilitated emissions baseline?
A4S has developed these top tips to help financial institutions to calculate their facilitated emissions baseline.
The guidance provides practical insights on how to get started, including using the PCAF Standard, embracing the data challenges and clearly communicating approach. The document has been brought together with insights from PCAF, the Net-Zero Banking Alliance and other individuals working in the space.
This guidance will help you understand:
- the difference between financed and facilitated emissions
- understand how to measure a facilitated emissions baseline
- implement the PCAF Standard
- consider the key assumptions in your facilitated emissions approach
“The capital markets determine where capital is allocated. Without sufficient capital directed towards lending and investments that support net zero, we won’t limit global warming to 1.5°C above preindustrial levels. Finance teams have a unique set of skills that can be leveraged to contribute to calculating a facilitated emissions baseline, which is a vital step towards financial institutions taking accountability for their facilitated emissions.” Helen Slinger, Executive Director, A4S
The guidance sits alongside A4S’s top tips for financed and insurance-associated emissions as well as a case study on the action taken by Barclays.
