PCAF expands global GHG accounting standard for financed and insurance emissions

The Partnership for Carbon Accounting Financials released an expanded Global GHG Accounting and Reporting Standard on December 2 2025, adding four new financed-emissions and two insurance methodologies that close existing accounting gaps. Indian banks, asset managers, and insurers can now measure Scope 3 Category 15 emissions across more complex instruments, sharpening transition-risk assessment and capital allocation.

The Partnership for Carbon Accounting Financials (PCAF) released a significant update to its Global Greenhouse Gas Accounting and Reporting Standard for the Financial Industry on December 2 2025, expanding the scope for financial institutions to measure and disclose emissions from financing and insurance activities. Developed by the Core Team and over 100 industry experts, the update introduces four new financed-emissions methodologies covering use-of-proceeds structures, securitisations and structured products, and sub-sovereign debt, plus an optional method for undrawn loan commitments aligned with IFRS S1 and S2. Existing methodologies remain unchanged, providing continuity.

The update affects banks, asset managers, insurers, and reinsurers measuring Scope 3 Category 15 emissions across diverse portfolios. New financed-emissions methods extend coverage to previously complex instruments including securitisations, structured products, and sub-sovereign debt, while two new insurance methodologies cover treaty reinsurance and project insurance. PCAF also launched supplemental guidance on Financed Avoided Emissions and Forward-Looking Metrics, establishing guardrails for institutions reporting future climate impact separately from historical emissions. Institutions must transparently disclose the percentage of their portfolio included and justify any current exclusions.

Financial institutions should assess how the four new financed-emissions methodologies and two insurance methodologies extend coverage of their portfolios, and set a feasible internal implementation timeline while transparently disclosing portfolio coverage percentages and exclusion justifications. Institutions reporting avoided emissions or forward-looking metrics should apply the new supplemental guidance guardrails. By harmonising accounting across complex portfolios, the standard supports more effective climate-related risk management, informs capital allocation strategies, and strengthens the credibility of disclosures for stakeholders across the market.

Key figure — New methodologies: four financed-emissions and two insurance methods added