The International Business of Federated Hermes, Triodos Bank UK, CDC Group and Ecology Building Society are also part of the UK arm of this initiative, which has been backed by former Bank of England governor Mark Carney.
The institutions will report the impact the money lent on mortgages, commercial real estate, SME loans and indirect investments has on climate change to the PCAF when they publish their financial results.
The partnership aims to standardise carbon reporting in the financial sector and will apply PCAF’s methods for measuring financed emissions in a UK context.
PCAF is chaired by the International Business of Federate Hermes and was set up in the Netherlands in 2015 to adhere to the Paris Agreement which aims to deal with greenhouse emissions.
PCAF expanded to America in 2018 with 12 financial institutions. NatWest was the first UK lender to join the coalition after it signed up in July.
There is a total of 77 institutions signed up from across Africa, North America, Latin America, Asia and Europe.
Reports from other institutions include a breakdown of the consumption and carbon emissions for each sector that has been invested into.
Giel Linthorst, executive director of PCAF secretariat, said: “The UK has always been a leader in the financial industry. I’m very pleased to see that this PCAF UK coalition is similarly taking a leading role as well.
“Stronger and national collaboration is crucial within PCAF to enable PCAF participants to improve their data quality and steer their portfolio in line with the Paris Agreement.”
Mark Carney, adviser for United Nations Climate Change Conference and observer to PCAF, added: “To achieve net zero we need a whole economy transition – every company, every bank, every insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them.
“For financial firms, that means reviewing more than the emissions generated by their own business activity. They must measure and report the emissions generated by the companies they invest in and lend to. PCAF’s work to standardise the approach to measuring financed emissions is an important step to ensuring that every financial decision takes climate change into account.”
