NatWest, Lloyds and Nationwide are among a group of UK financial institutions to join the Partnership for Carbon Accounting Financials (PCAF).

The UK division of PCAF, an industry-led partnership to standardise carbon accounting for the financial sector, will include the international business of Federated Hermes, Triodos Bank UK, NatWest Group, Lloyds Banking Group, CDC Group, Investec, Ecology Building Society and Nationwide Building Society.

Initiated and chaired by the International business of Federated Hermes, and following a collaborative structure first created in the Netherlands, PCAF said participants in the UK will use the coalition to enhance their cooperation on carbon accounting; a way of keeping track of emissions and carbon footprint.

The PCAF UK coalition will focus on applying its methodologies for measuring financed emissions in a UK context, sharing best practices, working on data quality improvements and performing research on further method development.

The PCAF has expanded quickly in recent months, from 50 financial institutions with over $3 trillion in assets at the global launch last September, to current membership of 77 financial institutions with over $13 trillion in assets. The group is also growing across North America, Latin America, Europe, Africa and Asia Pacific.

Former Bank of England governor Mark Carney, as the prime minister’s finance adviser for the next UN Climate Change Conference and observer to PCAF, commented: “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," he continued, adding: "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."

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