The Partnership for Carbon Accounting Financials (PCAF) has appointed PwC as a Global Accredited Partner, expanding the capacity available to banks, asset managers and other financial institutions seeking to measure, govern and disclose greenhouse gas emissions associated with lending and investment portfolios. The partnership comes as climate-related information is moving deeper into financial reporting and risk management, with institutions facing increasing demands for consistent emissions data, stronger controls and disclosure processes that can withstand regulatory, investor and assurance scrutiny.
Financed emissions are becoming one of the more consequential areas of corporate climate reporting because they capture emissions associated with the companies, projects and assets supported through a financial institution’s capital rather than emissions generated directly by its own offices and operations. Under the Greenhouse Gas Protocol, financed emissions are generally treated as Scope 3 Category 15 emissions. PCAF has developed a dedicated methodology to help financial institutions measure and report these emissions across different asset classes.
The addition of PwC to PCAF’s Global Accredited Partner network comes as financial institutions move beyond the initial task of calculating portfolio emissions. The more difficult challenge is increasingly how to establish reliable data systems, document methodologies, automate calculations, set credible targets and integrate climate information into decisions about capital allocation and financial risk.
PwC’s role will cover emissions baselining and calculation-engine development, alongside data governance, automation and AI-enabled data management. The firm will also support financial institutions with target-setting, disclosure readiness and independent assurance. Lynne Baber, Global Sustainability Leader at PwC, said the partnership would help institutions establish reliable data inputs and translate emissions analysis into information that can support portfolio management and climate strategy.
The development reflects a broader shift in the treatment of sustainability information. Climate data is increasingly being assessed not simply as an environmental reporting requirement but as information relevant to enterprise value, financial risk and strategic decision-making. IFRS S2, the International Sustainability Standards Board’s climate-related disclosure standard, took effect from January 2024 and requires entities with activities including commercial banking, asset management and insurance to provide additional information on financed emissions.
Importantly, IFRS S2 does not require financial institutions to use the PCAF methodology specifically. The IFRS Foundation has clarified that the standard does not prescribe a particular methodology for calculating financed emissions, although its requirements allow the market to converge around approaches such as those developed by PCAF. Institutions must disclose the methodology used to calculate their financed emissions.
PCAF’s own methodology has also evolved. Its third edition, released in 2025, expanded coverage of financial asset classes and introduced additional guidance, including an approach for reporting financed emissions associated with undrawn loan commitments intended to improve interoperability with IFRS S2.
This evolution matters because the quality of financed-emissions reporting depends heavily on the underlying data. Banks may have detailed information about the size, maturity and structure of a loan but limited direct information about the emissions profile of the borrower. Investment portfolios can present similar challenges, particularly where companies have incomplete emissions inventories or rely heavily on estimates.
PCAF’s standard seeks to address this problem through asset-class-specific methodologies and data-quality approaches. Its framework covers areas including listed equity and corporate bonds, business loans and unlisted equity, project finance, commercial real estate, mortgages and motor vehicle loans, with subsequent editions expanding the scope of financial activities covered.
For financial institutions, better data can have implications beyond disclosure. Portfolio emissions can help identify exposure to sectors facing carbon-pricing risks, technological disruption, regulatory changes or shifts in consumer and investor demand. IFRS guidance similarly recognises that borrowers and investees with higher greenhouse gas emissions can expose financial institutions to risks arising from technological, policy and market changes.
The issue has particular relevance for African financial institutions. Banks across the continent remain central to financing infrastructure, agriculture, mining, manufacturing, energy and transport, sectors that are simultaneously important for economic development and exposed to climate-transition risks. As African economies expand investment in energy, industry and infrastructure, the ability of lenders to understand the emissions and transition characteristics of their portfolios could increasingly influence how capital is priced and allocated.
For African banks, the challenge is complicated by data availability. Many businesses, particularly smaller enterprises, do not yet have comprehensive greenhouse gas inventories. Financial institutions may therefore need to combine borrower-level information with sectoral data, estimates and other proxies. Building reliable systems will require investment in data governance and technical capabilities alongside the development of appropriate methodologies.
This creates a practical intersection between sustainability reporting and financial-sector development. Stronger financed-emissions accounting can help institutions understand where climate exposure sits within their portfolios, but the usefulness of that information depends on the quality of the underlying data and the consistency of the methodology.
It also raises questions around access to finance. If banks increasingly incorporate emissions and transition information into credit and investment decisions, businesses that can demonstrate credible transition strategies and reliable climate data may be better positioned to access capital. Conversely, companies operating in high-emitting sectors without clear pathways for managing transition risks could face greater scrutiny.
For African economies seeking to mobilise private capital for the energy transition, this could become an important consideration. Financial institutions need information that allows them to distinguish between activities that are simply emissions-intensive and those that have credible pathways towards lower-carbon production. This distinction can affect financing decisions for renewable energy, clean transport, industrial efficiency, sustainable agriculture and other transition investments.
The governance implications are equally significant. As climate information becomes embedded in financial reporting, boards and senior executives increasingly need to understand who is responsible for the quality of emissions data, how calculations are reviewed and how climate metrics connect to risk management. This moves carbon accounting away from a specialist sustainability function and towards broader financial-control and governance systems.
PwC’s participation in the PCAF Accredited Partner Programme therefore comes at a point when the market is moving towards greater standardisation and assurance. PCAF describes its partner programme as a mechanism for supporting financial institutions implementing its accounting methodology, with participating organisations including consultancies, data providers and software companies.
For regulators and investors, the potential benefit is greater comparability. Consistent approaches can make it easier to assess the climate exposure of different portfolios and institutions, although differences in data quality, estimation methods and portfolio composition will continue to affect comparisons.
The African context adds another layer. Financial institutions across the continent will have to navigate global reporting expectations while operating in markets where climate-data infrastructure is still developing. The response is unlikely to be simply to replicate systems designed for mature markets. African banks and regulators will need approaches that reflect local data availability, economic structures and the development priorities of countries seeking to expand access to finance while transitioning towards more resilient economies.
The PwC–PCAF partnership consequently illustrates a broader change in sustainable finance: financed emissions are increasingly becoming part of the infrastructure through which financial institutions understand climate risk. The immediate task is technical — establishing accurate calculations and reliable data but the longer-term implications are financial and strategic.
For Africa, the key question will be whether better climate accounting can be used not only to satisfy disclosure requirements but also to improve capital allocation. If financial institutions can develop credible portfolio-level emissions data and integrate it with risk assessment, the information could help direct capital towards businesses and projects capable of supporting the continent’s transition without weakening its wider development objectives.
