PCAF Part A · Financed emissions
PCAF Part A: financed emissions, asset class by asset class
PCAF Part A is the financed emissions part of the PCAF Standard: the method for attributing a counterparty’s emissions to the institution that lends to it or invests in it.
Its Third Edition, published in December 2025, covers ten asset classes, three of them new.
It is the Part that covers what banks, insurers and asset managers hold on their balance sheets.
The boundary
What counts as a financed emission
Financed emissions are the emissions attributed to the loans and investments an institution makes.
The ISSB’s December 2025 amendments to IFRS S2 use exactly that boundary.
The amended ¶29A says “loans and investments” include “loans, project finance, bonds, equity investments and undrawn loan commitments”.
For an entity with asset management activities, financed emissions also include emissions attributed to assets under management.
The same paragraph lets an entity limit its Category 15 figure to financed emissions and exclude emissions attributable to derivatives.
UK SRS S2 carries the same ¶29A, because it includes the ISSB’s December 2025 amendments.
Capital-markets facilitation and insurance underwriting sit in Category 15 without being financed emissions, and are measured under PCAF Part B and PCAF Part C.
| Item | Inside the financed emissions boundary? |
|---|---|
| Loans | In |
| Project finance | In |
| Bonds | In |
| Equity investments | In |
| Undrawn loan commitments | In — PCAF now offers an optional line for them |
| Assets under management | In, for an entity with asset management activities |
| Derivatives | May be excluded |
| Facilitation and insurance underwriting | Category 15, but not financed emissions — see Parts B and C |
The principle
Outstanding amount over the value of the company
PCAF states the basic attribution principle in one line: the institution accounts for a portion of the borrower’s or investee’s annual emissions, set by the ratio of the outstanding amount to the value of the financed company.
That ratio is the attribution factor.
Financed emissions for a position are the attribution factor multiplied by the counterparty’s emissions, and the portfolio figure is the sum across positions.
For a business loan, the outstanding amount is the debt the borrower still owes — disbursed debt minus repayments — so the attribution falls to zero by the end of the loan.
For unlisted equity, the outstanding amount is the institution’s relative shareholding multiplied by the investee’s total balance-sheet equity.
Business loans in PCAF’s sense are on-balance-sheet loans and lines of credit for general corporate purposes, where the use of proceeds is unknown.
Revolving credit facilities and overdrafts fall in that class, off-balance-sheet exposures fall out, and lending with a known use of proceeds goes to commercial real estate, mortgages, motor vehicle loans or use of proceeds instead.
PCAF flags that loans into the financial sector cause double counting.
PCAF recommends reporting financed emissions to the financial sector separately.
The ten asset classes
Ten asset classes, ten denominators
The numerator is always the outstanding amount; the denominator is what changes.
| Asset class | Denominator of the attribution factor | Since |
|---|---|---|
| Listed equity and corporate bonds | Enterprise value including cash (EVIC) | First edition, 2020 |
| Business loans and unlisted equity | Total equity + debt; EVIC for business loans to listed companies | First edition, 2020 |
| Project finance | Total project equity + debt, or total project value at origination where total debt is not available | First edition, 2020 |
| Commercial real estate | Property value at origination | First edition, 2020 |
| Mortgages | Property value at origination | First edition, 2020 |
| Motor vehicle loans | Total value at origination | First edition, 2020 |
| Sovereign debt | Exposure to the sovereign bond ÷ PPP-adjusted GDP | Second edition |
| Sub-sovereign debt | Outstanding amount ÷ PPP-adjusted GDP | Third edition, December 2025 |
| Use of proceeds structures | New method — see Part A, Third Edition | Third edition, December 2025 |
| Securitisations and structured products | New method — see Part A, Third Edition | Third edition, December 2025 |
PCAF defines enterprise value including cash as the market capitalisation of ordinary shares and of preferred shares at fiscal year-end, plus the book values of total debt and minorities’ interests.
Cash is deliberately not deducted, so that a cash-rich company cannot produce a negative denominator.
Because EVIC is a market value, a listed holding’s financed emissions can rise or fall with share prices even when the company’s emissions do not change.
That is why the Third Edition recommends a fluctuation analysis and an inflation adjustment alongside the headline figure.
Each class also has its own data quality scorecard, set out on PCAF data quality scores.
Try it
Pick a class, enter your numbers
The calculator applies the Part A formula to one position.
Choose an asset class and it shows the denominator PCAF prescribes for that class.
Enter the outstanding amount, the denominator and the counterparty’s annual emissions, and it returns the attribution factor and the financed emissions.
The starting figures are invented and illustrative; they describe no real company.
Use of proceeds and securitisation positions are left out, because their Third Edition methods are not summarised on this page.
The same arithmetic, with the numerators set out for every class, is on financed emissions calculation.
Attribution calculator · illustrative
Denominator: Enterprise value including cash (EVIC). Also the denominator for business loans to listed companies.
- Attribution factor
- 5.00%
- Financed emissions
- 2,500 tCO₂e
Illustrative only: enter your own figures. Formula and denominators from PCAF Part A, Third Edition (December 2025). This is arithmetic, not advice on how to report.
December 2025
What the Third Edition changed
PCAF published the Third Edition on 2 December 2025, updating Part A and Part C together.
It added four financed-emissions methods: use of proceeds structures, securitisations and structured products, sub-sovereign debt, and optional reporting of undrawn loan commitments.
The undrawn commitments line is the one that bridges to IFRS S2, whose ¶29A counts undrawn loan commitments among loans and investments.
It also added two reporting recommendations: a fluctuation analysis and an inflation adjustment.
PCAF said plainly that “PCAF’s existing methodologies have not been changed”.
A figure calculated under the second edition for the original classes is therefore not wrong under the third; what changes is the coverage.
The same release published supplemental guidance on financed avoided emissions and forward-looking metrics, which PCAF says “are not part of the core financed emissions inventory”.
How Part A grew
- Nov 2020First edition
Six asset classes, reviewed by the GHG Protocol.
- 2nd ed.Sovereign debt added
PPP-adjusted GDP as the denominator.
- Dec 2025Third Edition
Use of proceeds, securitisations and structured products, sub-sovereign debt; optional undrawn loan commitments.
Source: PCAF standard page; PCAF launch notice, 2 Dec 2025
Counterparty emissions
Borrowers’ Scope 3 is now required
Part A no longer phases in the Scope 3 emissions of borrowers and investees sector by sector.
It says that, starting with reports published in 2025, Scope 3 emissions reporting is required for all sectors.
Institutions “shall separately disclose” the absolute Scope 3 emissions of borrowers and investees from their Scope 1 and 2 emissions.
Where Scope 3 is reported, its data quality score is also reported separately from the Scope 1 and 2 score.
That separation matters in a UK SRS S2 disclosure too, where ¶B61 asks an asset manager to disaggregate gross financed emissions by scope.
Provenance
Not every class carries the GHG Protocol’s mark
PCAF says Part A’s first edition, from November 2020, was reviewed by the GHG Protocol and conforms with the Scope 3 Standard for Category 15.
The Built on GHG Protocol mark was granted to the original six asset classes: listed equity and corporate bonds, business loans and unlisted equity, project finance, commercial real estate, mortgages and motor vehicle loans.
The GHG Protocol has since closed that review service.
So sovereign debt, sub-sovereign debt, use of proceeds structures, securitisations and undrawn loan commitments carry no such mark, and PCAF says so on its standard page.
That does not make the newer methods less usable; it means “reviewed by the GHG Protocol” cannot be said of the whole Standard.
The GHG Protocol describes the Standard on its own financial industry page.
Where it lands
Part A figures in a UK SRS S2 disclosure
UK SRS S2 was published by the Department for Business and Trade on 25 February 2026 and is available for voluntary use.
Its ¶29(a)(vi)(2) asks an entity with asset management, commercial banking or insurance activities for additional information about its financed emissions, set out in ¶¶B59–B63A.
Those paragraphs do not name PCAF; Part A is a method an entity may choose, not a requirement of the standard.
The ISSB’s December 2025 amendment also dropped the requirement to use the Global Industry Classification Standard, so ¶B62A now asks an entity to select an industry classification system and say which it used.
The UK added one paragraph of its own, ¶B59A, recorded in Annex A of the government’s response: an entity that cannot estimate financed emissions for the same period as its accounts must explain why and give its plan and timeline.
The FCA’s final rules in PS26/19 require listed companies in scope to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027, with Scope 3 — which includes financed emissions — under a one-year relief and then comply-or-explain.
The consultation, CP26/5, had proposed mandatory UK SRS S2; the final rules did not adopt it.
How this plays out for a lender is covered on UK SRS for banks, and the Standard as a whole on the PCAF Standard.
The GHG Protocol category behind all of this is explained on Scope 3 Category 15.
Frequently asked
PCAF Part A — frequently asked
What is PCAF Part A?
Part A is the Financed Emissions part of the PCAF Standard. It sets out how a financial institution attributes to itself a share of the greenhouse gas emissions of the companies, projects, properties, vehicles and governments it lends to or invests in. The current version is the Third Edition, published in December 2025.
How many asset classes does PCAF Part A cover?
Ten: listed equity and corporate bonds; business loans and unlisted equity; project finance; commercial real estate; mortgages; motor vehicle loans; sovereign debt; sub-sovereign debt; use of proceeds structures; and securitisations and structured products. The last three were added in the Third Edition in December 2025.
What is the attribution factor?
It is the outstanding amount divided by the value of the financed company or asset. PCAF calls this the basic attribution principle. Multiplying the attribution factor by the counterparty’s emissions gives the financed emissions for that position.
What is EVIC?
Enterprise value including cash. PCAF defines it as the market capitalisation of ordinary shares and of preferred shares at fiscal year-end plus the book values of total debt and minorities’ interests, with no deduction for cash. It is the denominator for listed equity and corporate bonds, and for business loans to listed companies.
What changed in the Third Edition?
PCAF added four financed-emissions methods — use of proceeds structures, securitisations and structured products, sub-sovereign debt, and optional reporting of undrawn loan commitments — and two new reporting recommendations, a fluctuation analysis and an inflation adjustment. PCAF said its existing methodologies were not changed.
Does Part A require borrowers’ Scope 3 emissions?
Yes. Part A says that, starting with reports published in 2025, Scope 3 emissions reporting is required for all sectors, and that financial institutions shall disclose borrowers’ and investees’ Scope 3 separately from their Scope 1 and 2.
Is PCAF Part A the same as Scope 3 Category 15?
No. Category 15, Investments, is the GHG Protocol’s category. Part A is PCAF’s method for measuring the financed emissions within it. IFRS S2 and UK SRS S2 let an entity limit Category 15 to financed emissions, which is the part Part A measures.
Is PCAF Part A mandatory in the UK?
No. It is a voluntary standard, and UK SRS S2, which asks for financed emissions information, does not prescribe PCAF. UK SRS itself is a voluntary standard; the FCA's final rules (PS26/19, 30 September 2026) require listed companies in scope to report against it on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- PCAFPart A: Financed Emissions, Third Edition (December 2025) — download
Attribution principle, numerators and denominators, the asset class definitions, Scope 3 of borrowers, the EVIC definition.
- PCAFPart A: Financed Emissions, Third Edition — pp42–155 (attribution) and p167 (data quality)
The edition as PCAF instructs it to be cited.
- PCAFThe Global GHG Accounting and Reporting Standard — standard page
Current editions; the Built on GHG Protocol statement for six asset classes; the avoided emissions fence.
- PCAFPCAF launches updated GHG accounting standard (2 December 2025)
Four new financed-emissions methods; "existing methodologies have not been changed".
- PCAFAbout PCAF
Who publishes the Standard.
- GHG ProtocolCorporate Value Chain (Scope 3) Standard — Category 15
The category Part A makes calculable.
- GHG ProtocolGlobal GHG Accounting and Reporting Standard for the Financial Industry — GHG Protocol page
The GHG Protocol’s own page on the PCAF Standard.
- IFRS FoundationAmendments to Greenhouse Gas Emissions Disclosures (IFRS S2), ¶29A
"Loans and investments" include loans, project finance, bonds, equity investments and undrawn loan commitments.
- IFRS FoundationISSB issues targeted amendments to IFRS S2 (December 2025)
The ISSB’s announcement.
- Department for Business and TradeUK SRS S2, ¶¶29(a)(vi)(2), 29A, B59–B63A
Financed emissions disclosure in the UK standard; ¶B59A.
- Department for Business and TradeUK SRS S1 and UK SRS S2 — publication page
Published 25 February 2026 for voluntary use.
- Department for Business and TradeUK SRS consultation response, Annex A
The ISSB’s December 2025 paragraphs carried into UK SRS S2; ¶B59A as the UK addition.
- Financial Conduct AuthorityPS26/19: Aligning listed issuers’ sustainability disclosures with international standards (30 September 2026)
The final rules: listed companies in scope report against UK SRS on a comply-or-explain basis for accounting periods starting on or after 1 January 2027, with a one-year Scope 3 relief.
- Financial Conduct AuthorityCP26/5 — Aligning listed issuers’ sustainability disclosures with international standards
The consultation PS26/19 finalises; it had proposed mandatory UK SRS S2.
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