A Christmas gift from the Partnership for Carbon Accounting Financials (PCAF) and something to get stuck into during the festive season. PCAF has released the third edition of its Global GHG Accounting and Reporting Standard for the Financial Industry, expanding how financial institutions measure financed emissions and related climate impacts.  

For financial institutions already aligning with the SBTi Financial Institutions Net-Zero (FINZ) Standard, this is not just a technical update, it subtly shifts what “complete” and “credible” financed emissions coverage looks like. 

At Simply Sustainable, we have summarised the key updates from the new standard:  

Boundary

The challenge with PCAF guidance and how this is applied has long been that there are a number of financial products not included in the scope of measurement. The new standard has expanded the boundary.  

• PCAF now covers previously hard-to-measure products including use-of-proceeds instruments, securitisations, sub-sovereign debt, and undrawn commitments. 

• Impact: Financial institutions will have fewer exclusions in their financed emissions inventories, which expands SBTi target coverage and may require baseline recalculations as previously out-of-scope exposures are brought in. 

Data quality

As with several other guidance documents and standards such as the draft of the scope 2 Greenhouse Gas Protocol standard, this new standard will require great data visibility and sharing:  

• New methodologies require deeper look-through data, better mapping of labelled instruments to project-level emissions and more granular treatment of structured products. 

• Impact: Institutions will need to upgrade data architecture, strengthen ESG data governance and ensure that data pathways are audit-ready ahead of SBTi submissions or target updates. 

Avoided emissions 

The standard is bringing concepts of avoided emissions and is formalising forward-looking metrics which breaks away from the alignment with SBTi: 

• PCAF introduces guidance on financed avoided emissions and new forward-looking indicators that go beyond traditional financed emissions accounting, and break alignment with SBTi rules. 

• Impact: These metrics can enrich an institution’s narrative, stewardship strategy and transition analysis, but they will not count towards SBTi target achievements and do not reduce reported financed emissions. 

Net zero 

With the announcement of the new financial institutions standard from SBTi, PCAF is reflecting this change in their standard:  

• New methods for treaty reinsurance and project insurance-associated emissions extend PCAF expectations across the insurance value chain. 

• Impact: Insurers and diversified groups will increasingly need to include underwriting emissions when setting or updating SBTi-aligned targets. 

As we head into 2026, PCAF’s latest update offers a timely reminder that now is the moment to tidy the data, refresh the strategy and greet the new year with confidence. 

If you are interested in looking at the standard in full then please find the link here. Or if you would like to speak with Will Bourns, Simply Sustainable’s Impacts and Dependencies Solutions Manager then email here.