Portfolio Carbon Initiative

Guidance for financial institutions to assess the climate impact from investing and lending activities

The world is already transitioning to a low-carbon economy. Financial institutions have the power to expedite and smooth the transition by limiting their contribution to the climate problem and growing their contribution to the climate solution. The Portfolio Carbon Initiative, a partnership with 2 degrees Investing Initiative (2DII) and UNEP Finance Initiative (UNEP FI), develops a series of resources to guide financial institutions in assessing the climate impact of their activities and carbon asset risk.

This initiative was previously called the Financed Emissions Initiative.

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Portfolio Carbon Initiative Goals and Work Streams

The Portfolio Carbon Initiative has two goals:

  • Provide guidance on how to define, assess, and track climate impact for asset owners and banks
  • Provide guidance on how to identify, assess, and manage “carbon asset risks” for financial institutions

The complexity of the financial sector requires that the Portfolio Carbon Initiative operate via three work streams.

Work stream 1: Asset owner climate friendliness 
Tailored to asset owners, this work stream produced a comparative analysis of current climate friendliness metrics, “Climate Strategies and Metrics: Exploring Options for Institutional Investors.”

Work stream 2: Bank climate friendliness (referred to as climate impact in this work stream) 
Tailored to banks, this work stream recently published a comparative analysis of current climate impact metrics for banks, “Climate Metrics: Exploring Options for Measuring and Reporting on Banks’ Climate impact.”  

Work stream 3: Carbon asset risk 
The guidance produced through this work stream, “Carbon Asset Risk: Discussion Framework,” explains why and when GHG emissions associated with carbon-intensive assets lead to financial risks, as well as how those risks can be assessed and managed.

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