How to calculate financed emissions under PCAF

Published 30 October 2026

How do you calculate financed emissions under PCAF?

A financed emissions calculation under PCAF multiplies each counterparty's emissions by your share of that counterparty, then adds the results across the book. PCAF calls the share the attribution factor: the outstanding amount of your loan or investment divided by the value of the company. For a listed company the value is enterprise value including cash (EVIC); for a private company it is total equity plus debt.

Financed emissions = the sum, across every counterparty, of (outstanding amount ÷ company value) × the counterparty's emissions

Every tool that supports PCAF runs that formula. What differs is the emissions figure for each counterparty, and the data quality score it brings with it. DitchCarbon supplies that figure for every holding, from verified emissions data for over 2 million organisations, built on primary emissions data wherever it exists, with the source document attached, and calculates the attributed financed emissions for each holding, so both sides of the formula can be traced line by line.

Which edition of the PCAF Standard applies?

The Third Edition of Part A, Financed Emissions, published by PCAF in December 2025. It covers ten asset classes: listed equity and corporate bonds, business loans and unlisted equity, project finance, commercial real estate, mortgages, motor vehicle loans, use of proceeds structures, securitisations and structured products, sovereign debt, and sub-sovereign debt.

The edition adds two reporting recommendations, per the executive summary: a fluctuation analysis that explains what moved absolute financed emissions between periods, and an inflation adjustment for the economic emission factors used at scores 4 and 5. The attribution factor and data quality options for each asset class are set out in PCAF data quality by asset class.

What are the steps, holding by holding?

Six, and the order matters because each step is tried before the one below it.

1. Match the holding to the right legal entity. A loan to a subsidiary takes the subsidiary's emissions and value; matched to the parent, the line is misstated. DitchCarbon resolves entities against DUNS, LEI and ISIN identifiers, and matches from a company name alone where that is all the book holds.
2. Look for the counterparty's own reported emissions first. For corporate holdings, a verified inventory scores 1 and an unverified one scores 2. A great many private companies publish one somewhere: an annual report, a sustainability statement, a regulatory filing, a response to a customer.
3. Where nothing is reported, use the company's physical activity data. Energy consumption with specific factors scores 2; production data scores 3.
4. Where there is no activity data, use the company's revenue with a sector factor. That scores 4. Only where revenue is missing too does the line fall to a sector factor on assets, which scores 5.
5. Apply the attribution factor and record which PCAF option produced the figure.
6. Weight the data quality score by outstanding amount and report it beside the financed emissions figure.

Each record in DitchCarbon states which method produced its figure (the organisation's own reported inventory, product data, activity data, or industry data where nothing better exists), so steps 2 to 4 arrive already sorted. DitchCarbon then applies the attribution factor in step 5, and the share of the book still on a sector factor is a number on screen.

Where do private companies land, and what moves them up?

Private holdings usually sit at score 4 or 5. Being private costs nothing on the scale itself: for business loans and unlisted equity the option table matches the listed one, and only the attribution denominator differs. Private holdings sit lower because private companies disclose less often, so the inputs the higher scores need are harder to find.

The move up is a change of input. A reported inventory takes a holding from 4 or 5 to 2, or to 1 where the inventory was verified. DitchCarbon finds those inventories before you ask anyone, matches them to the counterparty and keeps the document with the figure. For the holdings that matter and have published nothing, a request goes out prepopulated with what is already known, so the company's team adds its own figures to a record that already exists. Where nothing comes back, the line stays on its sector factor and the record says so.

What does a worked example look like?

Five business loans, with illustrative figures.

The weighted score is each holding's score multiplied by its outstanding amount, summed and divided by the £58m total: 147 ÷ 58 = 2.53.

Now suppose C turns out to have published an unverified inventory of 14,000 tCO2e in its sustainability statement. Its line becomes 0.25 × 14,000 = 3,500 tCO2e at score 2. The book falls to 13,550 tCO2e and the weighted score improves to 2.19. C's emissions did not change: the 1,500 tCO2e fall is a change of method, which is what the Third Edition's fluctuation analysis asks you to separate from real reductions. DitchCarbon records the method change on the line, with the document that caused it.

What does an auditor need to see?

For each holding they sample: the outstanding amount and its date, the company value and where it came from, the emissions figure with the document behind it, the PCAF option and score, and the reason the figure changed since the last period. An auditor who can open the source and see the same number can sign off the line.

Every figure on a DitchCarbon record links to the report it came from and carries its change history, with restatements merged into one series, and shows its assurance level: verified, disclosed or estimated. When the question turns to how the calculation itself can be relied on, the DitchCarbon calculator is verified to ISO 14064-3, limited assurance, by UL Solutions, renewed annually. The declarations are in the trust centre.

What should a tool that supports PCAF actually do?

Six things. The first is the arithmetic every tool shares; the other five decide whether the number survives an audit.

For how nine tools compare on these points, see the best financed emissions software for PCAF.

Do you have to replace the model you already run?

DitchCarbon can calculate the attributed financed emissions itself, or feed its counterparty figures into the model you already run, so your factor set and published baseline stay where they are either way. It moves the score 4 and 5 lines up the hierarchy inside them, line by line as better figures are found, with the same fallback order underneath: a disclosed figure first, a figure modelled from the company's own disclosures and revenue where there is none, a regionalised industry factor last. You decide when to recalculate, and the source for every changed line is on the record. The holdings that have already published move first, with numbers you can defend within 2 weeks. The full approach is on financed emissions.

Being asked for your emissions by a lender or investor?

Your own reported figure is what lifts your lender's data quality score from 4 or 5 to 2, and providing it costs you nothing. Claim your organisation's profile, check what DitchCarbon already holds against your name, and answer once for every lender, investor and customer that asks.