Guidance for Financed Emissions Accounting – Tenant-Owner Associations and Tenant-Owned Apartments
As part of their climate efforts, banks have begun to calculate and report their own and their customers’ greenhouse gas emissions.
Emissions are reported in three categories – scope 1, 2, and 3 – where scope 1 includes direct emissions from the bank’s own operations, scope 2 includes indirect emissions from purchased electricity, for example, and scope 3 includes emissions from customers’ operations (the value chain).
The emissions generated by the activities of customers that the bank finances are called financed emissions (scope 3).
Calculating financed emissions is an important part of assessing climate-related risks and opportunities, setting goals and milestones for the transition journey to the climate goal of net-zero emissions, and driving the transition in collaboration with customers, thereby contributing to the climate transition in society.
To calculate financed emissions, there is a voluntary global standard from the Partnership for Carbon Accounting Financials (PCAF). However, the PCAF standard does not cover the asset class of Tenant-Owner Associations and Tenant-Owned Apartments which is a common form of housing in Sweden and significantly financed by Swedish banks.
Against this background, a working group within the Swedish Bankers’ Association has developed a common calculation method for financed emissions for Tenant-Owner Associations and Tenant-Owned Apartments.
This guidance is based on PCAF and adapted to Swedish conditions and will be reviewed on a regular basis.