Diamond Trust Bank (DTB) has joined the Partnership for Carbon Accounting Financials (PCAF), becoming one of a growing number of African financial institutions adopting internationally recognised standards to measure and disclose greenhouse gas emissions associated with their lending and investment portfolios.
The membership covers DTB’s banking operations in Kenya, Uganda and Tanzania, marking an important step in the bank’s efforts to strengthen climate-related financial disclosures, improve transparency and establish a consistent framework for measuring financed emissions across its regional operations. The move reflects a broader transformation taking place within Africa’s financial sector, where banks are increasingly integrating climate risk into governance, lending decisions and sustainability reporting as investors, regulators and international capital markets place greater emphasis on environmental, social and governance (ESG) performance.
PCAF is a global industry-led initiative that provides financial institutions with standardised methodologies for calculating and disclosing greenhouse gas emissions linked to loans, investments and other financial assets. Established in response to growing demand for consistent climate reporting, the partnership now brings together more than 750 financial institutions worldwide, collectively representing hundreds of trillions of dollars in assets.
Unlike operational emissions, which measure the carbon footprint generated directly by a company’s own activities, financed emissions account for greenhouse gases produced by businesses and projects supported through lending and investment. For banks, these emissions often represent the overwhelming majority of their overall climate impact, making their measurement increasingly important for investors, regulators and stakeholders seeking greater transparency around climate-related financial risks. By joining PCAF, DTB will gain access to internationally recognised methodologies that enable financial institutions to quantify financed emissions across different asset classes, improve the comparability of climate disclosures and align reporting with emerging global sustainability frameworks.
Commenting on the announcement, Nasim Devji said the membership represents an important milestone in the bank’s sustainability journey.
“As a responsible financial institution, we recognise the important role banks play in supporting the transition to a more sustainable and resilient economy. Joining PCAF is an important milestone in our sustainability journey and will help us strengthen climate-related disclosures, improve our understanding of emissions associated with our financial activities, and support informed decision-making across the Group,” she said.
The announcement comes as climate-related financial disclosure is becoming an increasingly important component of banking regulation and investment decision-making globally. According to the International Sustainability Standards Board (ISSB), financial institutions are expected to disclose not only their direct emissions but also material climate-related risks associated with their financing activities. These disclosures enable investors to better assess transition risks, portfolio resilience and long-term financial performance. Across Africa, the adoption of financed emissions accounting remains at an early stage compared with more mature financial markets in Europe and North America. However, growing participation in initiatives such as PCAF demonstrates increasing recognition that climate considerations are becoming integral to banking strategy rather than remaining standalone sustainability initiatives.
The banking sector occupies a uniquely influential position in the transition towards lower-carbon economies. By determining how capital is allocated, banks influence investment decisions across sectors including energy, manufacturing, agriculture, transport, construction and infrastructure. Measuring financed emissions therefore provides institutions with greater visibility into how their lending portfolios contribute to climate risks and transition opportunities. According to the United Nations Environment Programme Finance Initiative (UNEP FI), integrating climate considerations into financial decision-making strengthens resilience by enabling institutions to identify sectors exposed to physical climate risks, evolving regulations and changing market preferences. It also supports the development of sustainable finance products capable of mobilising investment into renewable energy, climate-resilient infrastructure and low-carbon industries.
For East Africa, where economies continue to expand rapidly while pursuing ambitious climate and development objectives, the role of commercial banks is becoming increasingly significant. Governments across the region are investing in renewable energy, sustainable agriculture, green buildings and climate adaptation infrastructure, all of which require substantial private-sector financing alongside public investment. Kenya, in particular, has emerged as one of Africa’s leading sustainable finance markets, supported by the Central Bank of Kenya‘s Climate Risk Guidance for commercial banks and increasing adoption of ESG principles across the financial sector. Similar regulatory developments are also progressing in neighbouring Uganda and Tanzania as financial regulators strengthen oversight of climate-related financial risks.
DTB’s regional footprint positions the institution to apply consistent climate measurement methodologies across multiple jurisdictions, improving internal risk management while supporting increasingly harmonised sustainability reporting throughout East Africa. The decision to adopt PCAF methodologies also reflects changing investor expectations. Development finance institutions, multilateral lenders and institutional investors are placing growing emphasis on climate-related disclosures when allocating capital to African financial institutions. Banks capable of demonstrating robust environmental governance and transparent emissions reporting may therefore strengthen their access to sustainable finance and international investment.
Financed emissions accounting is also becoming increasingly relevant as African countries seek to mobilise private capital to achieve their climate commitments under the Paris Agreement. Public resources alone are insufficient to finance the continent’s energy transition, infrastructure expansion and climate adaptation needs. Commercial banks will therefore play a central role in directing investment towards projects aligned with national development priorities and climate objectives. Beyond disclosure requirements, measuring financed emissions provides banks with valuable analytical insights that can inform lending strategies, portfolio diversification and client engagement. Institutions are increasingly using emissions data to identify opportunities for green financing, develop sustainability-linked financial products and support customers in reducing their environmental footprint.
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For Africa’s financial sector, initiatives such as PCAF represent an important evolution from voluntary sustainability commitments towards measurable, comparable and decision-useful climate reporting. Standardised methodologies enhance market confidence by enabling investors and regulators to evaluate environmental performance using consistent metrics across institutions and jurisdictions. As sustainability reporting standards continue to converge globally, African financial institutions are likely to face increasing expectations to demonstrate robust climate governance alongside traditional financial performance. Banks that strengthen climate measurement capabilities today will be better positioned to navigate evolving regulatory requirements, respond to investor expectations and support the continent’s transition towards more resilient and sustainable economic growth.
DTB’s membership of PCAF therefore extends beyond a reporting exercise. It signals the growing integration of climate risk management into mainstream banking across East Africa and reflects a broader shift in which sustainability is becoming an increasingly important consideration in financial decision-making, capital allocation and long-term economic development.
