Global developments in assessing climate change risk

29 Nov 2013Archived News Dr Peter Holt Climate Change Matters

The Greenhouse Gas Protocol (GHG Protocol) and the United Nations Environment Programme Finance Initiative (UNEP FI) have begun the process for developing guidance to help financial intermediaries (FIs) assess the emissions from their lending and investments portfolios. The process will also enable the assessment of carbon asset risk exposure. Consider applying to join one of the Technical Working Groups. 

The GHG Protocol/UNEP FI Financial Sector Guidance will create a robust, harmonised approach to GHG accounting in the financial sector, which will facilitate greater transparency and a better-informed dialogue among all interested stakeholders. The launch of this initiative follows an extensive, eight-month scoping exercise that affirmed the need for this guidance. The GHG Protocol Financial Sector Guidance will be developed over the next two years through an inclusive, multi-stakeholder process. The guidance will be a supplement to the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, and will also build on the relevant methodologies that already exist.

GHG Protocol/UNEP FI are currently inviting stakeholders to express their interest for participating in Technical Working Groups (TWGs) to develop the content of the guidance.

Technical Working Group 1: Companies and projects: Includes lending to and investment in companies and projects – corporate stocks; corporate bonds; corporate loans; SME loans; project finance; and project bonds. Also includes financial advisory services such as underwriting (final decision about inclusion of advisory services to be determined by the TWG).

Technical Working Group 2: Governments: Includes government bonds; municipal bonds and government loans (lending to governments)

Technical Working Group 3: Consumers: Includes mortgages and personal loans

Technical Working Group 4: Cross-cutting issues: Includes business goals; data collection and quality; reporting; target setting; and performance metrics

Technical Working Group 5: Carbon asset risk: This separate but complementary Technical Working Group is focused on developing practical guidance to enable FIs to assess carbon asset risks in their equity, bond and loan portfolios

You may want to consider taking part in one or more TWGs, in order to be at the forefront of this exciting and wide-reaching development.

Participation will allow you to enhance your understanding of assessment methodologies, and drive harmonisation or influence the direction for this future reporting standard.

Given the global status of the GHG Protocol, Energetics is convinced that the Financial Sector Guidance will become the accepted industry standard shortly after its introduction.

For more information on the Call for Participation and Terms of Reference read the Greenhouse Gas Protocol/UNEP FI Financial Sector Guidance.

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