Partnership for Carbon Accounting Financials methodology used to measure financed emissions
Disclosure is a first step toward Vancity’s 2040 net-zero target
TERRITORIES OF MUSQUEAM, SQUAMISH and TSLEIL-WAUTUTH NATIONS and VANCOUVER, British Columbia, June 24, 2021 (GLOBE NEWSWIRE) -- Vancity today announced its public disclosure of its financed greenhouse gas emissions (GHG) – those from the loans, as well as from the investments it manages on behalf of members. Applying the methodology from the Partnership for Carbon Accounting Financials (PCAF), Vancity’s disclosure enables a greater understanding of its environmental impact within the framework of the Paris Agreement and lays the initial groundwork for setting its 2025 interim climate targets. This accounting allows Vancity to generate the foundational data needed to set its roadmap to net-zero.
A global partnership launched in 2019, PCAF standardizes GHG accounting for the financial sector, enabling a harmonized approach to the assessment and disclosure of greenhouse gas emissions financed by loans and investments. PCAF is used by asset owners, asset managers and financial institutions to support a broad range of climate initiatives and members of PCAF represent CAD$50 trillion from financial institutions globally. Vancity was the first Canadian financial institution to join PCAF as a working group member to contribute to the development of what’s now the Global GHG Accounting and Reporting Standard for the Financial Industry.
Vancity’s estimated financed and operational emissions for 2020 are as follows:
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Key findings:
- While these preliminary results are estimates, and mostly rely on sector, building or vehicle averages, they provide meaningful insights and a starting place for future disclosures. The results also underscore the need for better data availability sector-wide.
- Financed emissions from Vancity’s lending, as currently calculated, are 36 times more than its operational emissions. A Climate Disclosure Project report estimates that the average difference between lending and operations across the banking sector is closer to 700 times.
- Vancity’s commercial real estate portfolio (loans used to purchase and refinance commercial real estate) is responsible for the most emissions, while motor vehicle loans generate the highest emissions per dollar loaned.
- Most emissions attributed to residential mortgages are generated by single detached homes and are related to natural gas usage.
- A significant source of emissions generated from Vancity’s general business loans is related to the construction and renovation of buildings, a sector with around 10 times the emissions of any other sector supported by the credit union.
While many financial institutions must contend with emissions from fossil fuels, Vancity does not lend or directly invest in that sector and most of its financed emissions come from its mortgage portfolio. The insights from this disclosure point to opportunities for the greatest reductions, such as developing products and partnerships, and making information available that will help members to affordably retrofit homes and replace gas-powered heating and cooling systems with more lower emitting solutions.
“Tackling the climate crisis requires an urgent system-wide response, and financial institutions have to take ambitious action – even if that means shifting how we all do business. Credible climate accounting and disclosure are at the heart of the necessary shift,” said Christine Bergeron, Vancity President and CEO.
“What gets measured, matters,” said Christine. “When the financial sector decides that emissions are important, it becomes a priority in the wider economy. Climate targets must come with actions to reduce emissions. And to do that you need to know where you are starting from. Vancity’s disclosure is voluntary, and we’ll continue to report out every year, but Canada’s financial system needs a standardized approach to climate risk metrics if we’re going to be able to understand the broader risks posed by the climate crisis,” she continued.
“We’re pleased to see Vancity continue to set an example in the region as not only an early adopter of PCAF, but also one of the first North American financial institutions to measure and disclose their financed emissions using the PCAF Standard,” said Nicole Labutong, PCAF North America Regional Lead.
Vancity will disclose its emissions annually while seeking to improve data quality and availability as it builds scenario-based interim targets, beginning with targets for 2025. The credit union has committed to achieving net-zero emissions across its lending portfolio by 2040.
Supporting information
- Vancity set its net-zero by 2040 target in January 2021
- In April 2021, Vancity became the first, and so far, only, Canadian financial institution to join the Net-Zero Banking Alliance
- In 2020, Vancity declared its support for the Task Force on Climate-related Financial Disclosures (TCFD)
- In 2019, the credit union signed the Global Alliance for Banking on Values’ Climate Change Commitment and joined the Partnership for Carbon Accounting Financials (PCAF), committing to measure and disclose the climate impact of its loans and investments
- Vancity is also a signatory to the United Nations Environment Programme Finance Initiative’s (UNEP FI) Collective Commitment to Climate Action, which requires signatories to set and publish targets for aligning their portfolios to strive for a 1.5 degree Celsius trajectory, based on scientifically established climate scenarios
- Vancity’s President and CEO, Christine Bergeron, represents North America on the UNEP FI’s Banking Board
For more information about Vancity’s climate disclosure and commitments, please visit rethink.vancity.com/climatedisclosures
About Vancity
Vancity is a values-based financial co-operative serving the needs of its more than 550,000 member-owners and their communities, with offices and 55 branches located in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay, within the territories of the Coast Salish and Kwakwaka’wakw people. With $30.5 billion in assets plus assets under administration, Vancity is Canada’s largest community credit union. Vancity uses its assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.
About PCAF
The Partnership for Carbon Accounting Financials (PCAF) was launched globally in September 2019. Currently, more than 130 banks and investors have subscribed to the PCAF initiative. PCAF participants work together to jointly develop the Global GHG Accounting and Reporting Standard for the Financial Industry to measure and disclose the greenhouse gas emissions of their loans and investments. By doing so, PCAF participants take an important step to assess climate-related risks, set targets in line with the Paris Climate Agreement and develop effective strategies to decarbonize our society.
For more information see https://carbonaccountingfinancials.com/
Media Contact:
Nora Eastwood | Vancity
mediarelations@vancity.com
T: 778-837-0394