Audit-Ready Financed Emissions Reporting for Commercial Banks
Track PCAF-aligned Scope 3 Category 15 emissions across corporate loans, SME lending, project finance, and commercial real estate portfolios.
The Industry Hotspot: Financed Emissions Dwarf Operational Carbon
95-99% of footprint in financed emissionsFor commercial banks, 95-99% of carbon footprint lives in Scope 3 Category 15 (financed emissions) from loan portfolios. A $10B corporate loan book to fossil fuel, steel, and cement companies can generate 1-5 million tCO2e annually—500-2,500x the bank's operational emissions from branches and offices. NetNada automates PCAF calculations, tracks borrower emissions data quality, and generates Net Zero Banking Alliance-aligned disclosures.
SASB Industry Definition
Commercial banks accept deposits and make loans to individuals and corporations, and engage in lending to infrastructure, real estate and other projects. By providing these services, the industry serves an essential role in the functioning of global economies and in facilitating the transfer of financial resources to their most productive capacity. The industry is driven by the volume of deposits, quality of loans made, the economic environment and interest rates. The risk from mismatched assets and liabilities further characterises the industry. The regulatory environment governing the commercial banking industry witnessed significant changes in the wake of the 2008 global financial crisis and continues to evolve today. These and other regulatory demands may affect performance. Commercial banks with global operations must manage new regulations in many jurisdictions that are creating regulatory uncertainty, particularly regarding the consistent application of new rules.
Industry-Specific Carbon Accounting
No generic solutions. Metrics, data sources, and reporting aligned to Commercial Banks operations.
PCAF-Aligned Financed Emissions Calculation
Automated calculation: Borrower Emissions × Attribution Factor (Outstanding Loan ÷ [EVIC + Debt]). Handles 4 asset classes: corporate loans, SME loans, project finance, commercial real estate. Updates quarterly with refreshed borrower data.
Borrower Emissions Data Integration
Import borrower Scope 1+2 emissions from CDP disclosures, sustainability reports, and third-party databases (Trucost, S&P Global). Flag missing data; apply sector averages with PCAF Data Quality Score 4-5.
Sectoral Decarbonization Analysis
Track financed emissions by borrower sector (oil & gas, utilities, steel, cement, real estate). Identify high-emission exposures. Model portfolio decarbonization scenarios (e.g., '25% reduction by 2030').
Net Zero Banking Alliance Reporting
Generate NZBA-required disclosures: baseline financed emissions, sector targets, annual progress, borrower engagement. Support SBTi Financial Institutions Net-Zero (SBTi FI) target submission.
Climate Risk Scenario Analysis
Model loan portfolio under NGFS climate scenarios (orderly 1.5°C, disorderly 2°C, hot house 3°C+). Estimate credit losses from stranded assets, carbon pricing, physical climate damage.
Green Loan Taxonomy Alignment
Tag loans to EU Taxonomy-eligible activities (renewable energy, green buildings, electric vehicles). Calculate % of loan book that is Taxonomy-aligned. Support green bond reporting.
Product Features for Commercial Banks
Use our Scope 3 Calculator to automate PCAF financed emissions calculations across all loan portfolio asset classes. Learn more →
Commercial Banks Case Studies
How entities in this industry use NetNada to solve carbon accounting challenges.
Challenge
AASB S2 required Scope 3 Category 15 disclosure. Had loan data but no borrower emissions data for 80% of SME customers.
Solution
Used NetNada PCAF calculator with sector average emission factors for SMEs (PCAF Data Quality Score 4). Engaged top 50 corporate borrowers (70% of book) for primary data (Score 2). Completed baseline calculation in 8 weeks.
Result
Disclosed $25B portfolio generates 850,000 tCO2e financed emissions. Set 25% reduction target by 2030. Received limited assurance from EY.
Challenge
Committed to net zero financed emissions by 2050. Needed sectoral targets for oil & gas, power generation, steel, cement per NZBA requirements.
Solution
NetNada calculated baseline financed emissions by sector. Modeled IEA Net Zero Scenario decarbonization pathways. Set sector targets: Power -50% by 2030, Oil & Gas -30% by 2030, Steel -25% by 2030.
Result
Published sector targets 6 months after NZBA commitment. Tracking quarterly progress. Shifted $500M lending from fossil fuel to renewable energy projects.
SASB Disclosure Topics for Commercial Banks
Material sustainability topics beyond emissions that investors and stakeholders expect disclosed per SASB standards.
Financed Emissions
environmentCalculate Scope 3 Category 15 using PCAF methodology across corporate loans, SME lending, project finance, commercial RE. Report absolute emissions, attribution factors, and data quality scores (1-5).
Transition Risk in Loan Portfolio
business modelReport % of loan book to carbon-intensive sectors (oil & gas, coal mining, utilities, heavy industry). Assess borrower transition plans and stranded asset risk.
Climate Risk Integration
governanceDisclose climate risk integration in credit underwriting. Report % of loans with climate risk assessment. Track climate-related loan loss provisions.
Green Lending and Sustainable Finance
business modelReport green loan origination volumes. Track % of loan book aligned to EU Taxonomy or Australian Sustainable Finance Taxonomy. Disclose renewable energy project finance.
Data Security & Customer Privacy
governanceTrack data breaches, customer data incidents, and compliance with privacy regulations. Report cybersecurity investments.
Financial Inclusion
socialReport SME lending access, underserved community branches, and responsible lending practices. Track financial literacy program reach.
NetNada tracks all SASB material topics, not just emissions. Our platform supports disclosure across environmental, social, governance, and business model topics relevant to your industry.
Commercial Banks FAQs
Common questions about carbon accounting for this industry
Calculate PCAF Financed Emissions Across Your Loan Portfolio
See how commercial banks automate PCAF calculations, track borrower emissions data, and meet NZBA and AASB S2 requirements—without manual spreadsheets.