Carbon Accounting
for Banks

Partnership for Carbon Accounting Financials (PCAF) is the first public report outlining a methodology to measure banks’, credit unions’ and other lending institutions’ contributions to greenhouse gas emissions. Beneficial State was a key contributor in the creation of a PCAF for American and Canadian financial Institutions.


Climate change threatens us all, and consequences of inaction have been dire for many of the world’s most vulnerable. We face a present and future with rising sea levels, extreme weather events, drought, poor air and water quality. Banks, as financiers for all industries, must take action to reduce the carbon footprint of their investments. In order to do so, banks should measure, disclose, and set targets to reduce their contributions to greenhouse gas emissions and ecological destruction. Partnership for Carbon Accounting Financials (PCAF) is the first public report outlining a methodology to measure these greenhouse gas contributions.

The majority of a bank’s carbon footprint does not come from its branches or other offices; rather, a bank’s contribution to greenhouse gases occurs indirectly, through loans and investments–for example, small business loans, or project financing for the construction of oil pipelines. In carbon accounting practice, the latter is referred to as Scope 3 (investments), while the former is typically limited to Scopes 1 and 2. (Diagram below)


Source: Carbon Trust


Some banks–including Beneficial State Bank, engage third party evaluators to calculate their carbon footprint. These largely evaluate Scope 1 and 2 emissions.

Few, if any, US banks measure or disclose the carbon footprint of their lending and investment portfolios.

Furthermore, there was no internationally-recognized methodology to do so, despite urging by many international organizations such as the UN Environmental Program Finance Initiative on the importance of financial institutions measuring their carbon footprints. 

In January 2019, facilitated by associates from the consulting firm Navigant, Beneficial State Foundation engaged with seven other banks and credit unions to draft the beginnings of the PCAF-North America methodology and report. The group completed this report by October 2019 and publicly launched it during Climate Week in New York City. 

The group was initially led and convened by Ivan Frishberg of Amalgamated Bank, who sought and found eager participation by members of the Global Alliance for Banking on Values (GABV). The project was generously supported by the Hewlett Foundation. 

While Partnership for Carbon Accounting Financials (PCAF)–Netherlands was the first to outline such a methodology in detail, it was clear that banks, credit unions, and CDFI’s operating in the US and Canada needed to adjust this methodology to align more closely with American/Canadian financial reporting practices and regulatory requirements.


While producing a methodology to calculate the carbon footprint of bank financing activities was a huge feat in and of itself, the true impact we seek is industry-wide disclosure and radical transparency. It is not enough for banks to disclose their financing activities only in response to heightened media coverage of oil spills, mass school shootings, the proliferation of private prisons and detention centers; nor should the burden of pressuring banks or revealing bank involvement in financing climate change fall on citizens’ groups and grassroots coalitions. By participating in PCAF-NA, calculating our emissions contributions, and soon disclosing them, we can begin to work toward reducing our own portolio’s emissions. And more importantly, we demonstrate to other banks that it is possible and necessary to do so.


We have measured the carbon emissions of some asset classes, but not all. Beneficial State Bank will measure the carbon emissions of our entire portfolio for the first time in 2020, with the 2019 loan portfolio. We also intend to set science-based targets in the near future, and report reductions/increases over time.

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