20 December 2022 (Updated 31 August 2023)

What’s the issue?

The measurement of financed and facilitated emissions is a complex and fast-moving area. These emissions represent key metrics for commercial banks, insurance companies and asset managers (together, ‘financial institutions’). They help users to understand what the financial institution is funding and therefore both its ability to influence global emissions and its exposure to transition risk.


A minority of global banks currently disclose financed emissions for a subset of their lending exposures – i.e. those in specific sectors. However, measurement methodologies and practices continue to evolve and vary, and many financial institutions do not currently disclose them.

Emissions that financial institutions fund is an important area where the International Sustainability Standards Board can drive consistency in a way that acknowledges the complexity and allows for calculation methodologies to evolve in practice.

What are the requirements?

The climate standard1 requires financed emissions disclosures for companies with commercial banking, insurance, or asset management activities. To avoid restricting the development of industry practice, the measurement requirements are high-level, and companies need to disclose the methodology used.

Facilitated emissions disclosures for investment banking and brokerage activities are not explicitly required because the methodology is not yet sufficiently mature.

The financed emissions disclosure requirements include the following.


Reliefs are available, including a later effective date for all Scope 3 disclosures and permitting inclusion of value chain information with non-aligned reporting periods.

Facilitated emissions disclosure is as an area for future consideration, along with emissions associated with insurance (or re-insurance) underwriting portfolios.

What’s the impact?

The requirement to report on financed emissions brings with it various complexities, including determining appropriate measurement methodologies. Our benchmarking analysis showed that the reported Scope 3 emissions of most banks currently exclude any financed emissions.

Financial institutions reporting these metrics will need a lot of data – it may take many years to gather relevant data and develop effective reporting, so they should start now.

Actions for management

  • Familiarise yourself with the requirements for commercial banking, asset management and insurance activities.
  • Work with a specialist to understand how the climate standard applies to your lending or investment portfolio and what data will be required.
  • Consider the systems, processes and controls needed to support your reporting.
  • Engage with peers – the PCAF2 standard is an example of industry-led collaboration to resolve a complex challenge. This industry-led collaboration is expected to continue.
  • Follow the discussion of topics marked for future consideration.

1 IFRS S2 Climate-related Disclosures.

2 Partnership for Carbon Accounting Financials.

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