Mizuho Financial Group, Inc. (President & Group CEO: Tatsufumi Sakai) has been appointed chair of the newly established Japan coalition of the Partnership for Carbon Accounting Financials (PCAF). The coalition was launched today by the six Japanese financial institutions participating in the global, industry-led PCAF initiative.
Since the adoption of the Paris Agreement in 2015, climate change initiatives have grown rapidly on a global scale. With the accelerating momentum toward achieving a low-carbon society and carbon neutrality by 2050, financial institutions are increasingly focusing on measuring and reducing greenhouse gas (GHG) emissions within their lending and investment portfolios.
PCAF develops and implements open-source methodologies to measure the GHG emissions of financial institutions’ lending and investment portfolios. As of November 2021, over 170 financial institutions globally in 48 countries have joined PCAF, including commercial banks, investment banks, insurance companies, and institutional investors.
The PCAF Japan coalition, with the support of PCAF Global, will promote the sharing of experience, knowledge, and issues among participating financial institutions and the financial sector. The collaboration will promote the adoption and expansion of the measurement and disclosure of GHG emissions from loans and investments by Japanese financial institutions.
In addition to our current measurement and disclosure of GHG emission intensity in relation to project finance for power generation projects, based on the PCAF Global GHG Accounting and Reporting Standard for the Financial Industry released in November 2020, this fiscal year we have started expanding measurement for a wider range of target assets and sectors on a trial-and-error basis, while utilizing PCAF’s insights and emission factor database.
In exploring the estimation of GHG emissions and methods for utilizing such data, we have come across several practical challenges. These include interpretation of industry types according to Japanese standards, insufficient GHG emission and other data from financed entities, a need for efficient data collection methods, and duplicated emissions counting at various levels.
To overcome these challenges, it is important that we further strengthen collaboration with our various stakeholders, including collaboration in the financial sector. As a first step, we contributed to the establishment of the PCAF Japan coalition as the first Japanese financial institution to join PCAF. Going forward, in our role as the PCAF Japan coalition chair, we will demonstrate leadership toward expanding the measurement and disclosure of GHG emissions among Japan’s financial institutions. This will work toward strengthening collaborations with PCAF signatories around the world, including those in the Asia-Pacific region.
We will proactively fulfil our role as a financial services group in the effort to achieve a low-carbon society and to positively contribute to the development of a climate change resilient society by 2050.
[References]FAQ about PCAF(PDF/95KB)