Dutch banks to develop yardstick to measure climate impact

Source: ABN Amro

Ten Dutch financial institutions have set up a platform to jointly develop methods to measure the climate impact of their investment and financing activities.

The new initiative, known as the Platform Carbon Accounting Financials (PCAF), was launched today in the presence of Deputy Minister of Infrastructure and the Environment, Sharon Dijksma.

The platform also presented the Dutch Carbon Pledge, in which they call on the negotiators at the Paris Climate Summit to take on board the role that investors and financial institutions could play in achieving climate goals.

The members of the platform are the Dutch financial institutions ABN AMRO, Actiam, APG, ASN Bank, FMO, MN Services, PGGM, SNS Bank, Stichting Pensioenfonds Metaal en Techniek (PMT) and Stichting Pensioenfonds van de Metalektro (PME).

Carbon footprinting
Climate change is caused by carbon emissions. Banks, insurance companies, pension funds and other financial institutions contribute to these emissions indirectly by making money available for activities that produce greenhouse gases. For example, they extend loans to electric power stations, the manufacturing industry and the transport sector.

Conversely, by financing sustainable energy and energy-saving programmes they contribute to reducing carbon emissions, and they can leverage their position as shareholders and financiers by requiring companies to make their business operations more sustainable.

Financial institutions can set off their contribution to reducing carbon emissions against their investments in activities that increase such emissions. The platform will seek to find ways to measure this as accurately as possible. This is a first step towards reducing their negative footprint and developing solutions for a sustainable world.

International protocol
The participants in the PCAF will base the development of a tool to measure carbon footprinting on the international protocol of the World Resources Institute (WRI) and the World Business Council on Sustainable Development (WBCSD). The protocol is an important international standard for measuring carbon emissions.

Key to the strategy
“The impact of investment and financing activities on climate is receiving worldwide attention. The main issue is how to measure this impact,” says Piet Sprengers, chairman of the platform. “Various financial institutions are trying to answer this question by joining forces in the PCAF. It’s a complex issue, but for many financial institutions it’s the key to shaping a strategy for finding solutions to the climate problem.”

Clear goals
If the participants in the PCAF have more insight into the carbon impact of their investment and financing activities, they will be better able to measure their climate footprint. And this will help them formulate climate goals for their activities. In doing so, they will contribute to a low-carbon society.

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