The coalition includes Natwest, Lloyds Banking Group, Investec and Nationwide and is chaired by the international arm of investment manager Federated Hermes.

The PCAF is a partnership aimed at standardising carbon accounting in financial services. Its methodologies will be applied to the coalition to accurately measure carbon emissions in a UK context.

This will have the desired effect of sharing best practices, improved data quality and researching further method development.

"The strength of PCAF is the collaboration," executive director, Giel Linthorst, tells Finextra Research.

"We all have this issue with data and only by collaborating with a multiple set of financial institutions and governmental agencies will we get access to better quality of data."

PCAF is addressing this through 'scoring' the data provided, giving institutions an additional instrument to steer on its quality.

"Some financial institutions use proxy-estimated data, which helps to develop a strategy to improve data quality over time and that is enabled by this data quality scoring," Linthorst says.

PCAF claims that its open-source, free-of-charge initiative will allow banks to access the greenhouse gas emissions of their lending books and portfolios and help align their strategies with the Paris Climate Agreement.

Mark Carney, former governor of the Bank of England and observer to PCAF describes the coalition as an important step in placing carbon emissions at the heart of the financial decisions.

"For financial firms, that means reviewing more than the emissions generated by their own business activity," Carney says.

"They must measure and report the emissions generated by the companies they invest in and lend to."