The Partnership for Carbon Accounting Financials

The TCFD are a set of guidelines developed in 2015 by the Financial Stability Board to develop consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders. The TCFD takes a non-prescriptive, outcome-focused approach and only provides recommendations and guidance on the topics it wants users to report on. It does not provide detailed guidance on the exact metrics to be reported or the exact methodology used by different companies. To circumvent this limitation, the Global GHG Accounting and Reporting Standard was developed by PCAF to provide granularity and methodological guidance for measuring and disclosing financed, facilitated and insurance-associated emissions for the financial sector. PCAF’s recommendations are likely to evolve over time.

PCAF acknowledges that models may have data and methodological issues, at least during a transitional phase. As of now, PCAF encourages using approximated or proxy data to measure GHG emissions in the absence of high-granularity data. Since the quality of data might vary depending on assumptions, PCAF mandates the use of data quality scores to guarantee disclosures are accurate, comprehensive, consistent, and transparent. Scores range from 1 – the best – to 5, which is the least ideal. The table below presents how the data quality scores are measured.

_Table:_{PCAF data quality scoring template}_{(PCAF, 2022, p. 57)}
_{Data Quality}	_{Options to estimate the financed emissions}		_{When to use each option}
_{Score 1}	_{Option 1: Reported emissions}	_1a	_{Outstanding amount in the company and EVIC are known.}_{Verified emissions}_{of the company are available.}
_{Score 2}	_{Option 1: Reported emissions}	_1b	_{Outstanding amount in the company and EVIC are known.}_{Unverified emissions}_{calculated by the company are available.}
_{Score 2}	_{Option 2: Physical activity-based emissions}	_2a _{(only for S1 and S2)}	_{Outstanding amount in the company and EVIC are known. Reported company emissions are not known. Emissions are calculated using primary physical activity data of the}_{company’s energy consumption}_{and (supplier-specific) emission factors specific to that primary data. Relevant process emissions are added.}
_{Score 3}	_{Option 2: Physical activity-based emissions}	_2b	_{Outstanding amount in the company and EVIC are known. Reported company emissions are not known. Emissions are calculated using primary physical activity data of the}_{company’s production}_{and emission factors specific to that primary data.}
_{Score 4}	_{Option3: Economic activity-based emissions}	_3a	_{Outstanding amount in the company, EVIC, and the}_{company’s revenue}_{(or other suitable indicator) are known. Emission factors for the sector per unit of revenue are known (e.g., tCO2e per euro or dollar of revenue earned in a sector).}
_{Score 5}		_3b	_{Outstanding amount in the company is known. Emission factors for the sector per unit of asset (e.g., tCO2e per euro or dollar of asset in a sector) are known.}
_{Score 5}		_3c	_{Outstanding amount in the company is known. Emission factors for the sector per unit of revenue (e.g., tCO2e per euro or dollar of revenue earned in a sector) and}_{asset turnover ratios}_{for the sector are known.}
_Note:_{Score 1 represents the highest data quality, and score 5 represents the lowest data quality.}

_{PCAF (2022).}_{The global GHG accounting and reporting standard part A: Financed emissions}_{. Second Edition.}_{https://carbonaccountingfinancials.com/files/downloads/PCAF-Global-GHG-Standard.pdf}