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Audit-Ready Carbon Reporting for Consumer Lenders

Track financed emissions from auto loans and vehicle leases. Calculate use-phase fuel consumption and portfolio decarbonization as loan book shifts to EVs.

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The Industry Hotspot: Auto Loan Use-Phase Emissions

90-95% from auto loans

For consumer finance companies, 90-95% of financed emissions come from auto loans and vehicle leases (Scope 3 Category 15). A $30,000 auto loan for a gasoline sedan generates ~20 tCO2e over 5-year use phase (15,000 km/year × 0.25 kgCO2/km). Electric vehicle loans generate 60-80% lower use-phase emissions depending on grid mix. NetNada calculates loan-level emissions using vehicle make/model, fuel economy, and loan-to-value attribution per PCAF Motor Vehicle Loans standard.

SASB Industry Definition

The Consumer Finance industry provides credit and financing services directly to consumers, including auto loans, motor vehicle leases, credit cards, personal loans, student loans, and point-of-sale financing. These entities originate loans, purchase loans from other lenders, and service loan portfolios. Revenue primarily comes from interest income and fees. The industry includes captive auto finance arms of manufacturers and independent consumer lenders.

View SASB Standard →

Industry-Specific Carbon Accounting

No generic solutions. Metrics, data sources, and reporting aligned to Consumer Finance operations.

PCAF Motor Vehicle Loan Calculations

Import loan data: vehicle VIN, make, model, year, loan amount, outstanding balance. Match VIN to EPA fuel economy database. Calculate use-phase emissions: Annual km × Fuel consumption (L/100km) × Emission factor (2.3 kgCO2/L gasoline). Attribution = Outstanding balance ÷ Vehicle value.

Loan-level emissions tracked

EV vs ICE Portfolio Comparison

Segment portfolio by powertrain: ICE gasoline (150-250 gCO2/km), Hybrid (80-120 gCO2/km), Plug-in hybrid (40-80 gCO2/km), Battery EV (20-60 gCO2/km based on grid). Track % of new loan originations for EVs vs portfolio average carbon intensity.

Portfolio carbon by fuel type

Green Auto Loan Product Impact

If offering preferential rates for EVs (e.g., -0.5% APR for BEV loans), track uptake rate, emissions avoided vs baseline scenario, and revenue impact. Calculate carbon abatement cost per tonne: Revenue foregone ÷ Lifetime emissions avoided.

Green product ROI tracked

Credit Card and Personal Loan Emissions

For non-vehicle consumer credit, use spend-based method: Credit card purchases × Emission factor per $ spent (EEIO table by merchant category code). Example: $1,000 spent on gasoline (MCC 5541) = $1,000 ÷ $1.50/L × 2.3 kgCO2/L = 1,533 kgCO2. PCAF Score 4-5.

Spend-based attribution

Portfolio Decarbonization Trajectory

Model loan book emissions over time as fleet electrifies. Scenario: If 10% of new loans are EV in 2026, 30% in 2028, 60% in 2030 → Portfolio carbon intensity declines 15% by 2030 as older ICE loans mature and new EV loans originate.

Decarbonization pathway modeled

Product Features for Consumer Finance

Use Carbon Data Uploader to import auto loan data with VIN numbers, match to EPA fuel economy database, and calculate financed emissions per PCAF motor vehicle standard. Learn more →

The Activity Calculator applies PCAF attribution factors for motor vehicle loans (outstanding balance ÷ vehicle value) and spend-based methods for credit cards. Learn more →

Related Solutions

See our Carbon Accounting solution for financed emissions tracking across auto loans, leases, and consumer credit portfolios.

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Consumer Finance Case Studies

How entities in this industry use NetNada to solve carbon accounting challenges.

Captive Auto Finance Company (A$15B loan portfolio, 500,000 vehicles)

Challenge

Parent automotive OEM committed to net-zero by 2040 including financed emissions. Needed to track portfolio carbon intensity as product mix shifted from ICE to EV. Lacked VIN-level fuel economy data.

Solution

Deployed NetNada with VIN decoder integration. Matched 95% of loan portfolio to EPA/Euro NCAP fuel economy ratings. Calculated baseline: 180 gCO2/km average weighted by outstanding balance. Set 2030 target: 100 gCO2/km.

Result

Established baseline financed emissions: 2.4 million tCO2e annually. Launched green auto loan program (0.5% rate discount for EVs). Tracked quarterly: EV % of new loans increased from 8% to 22% in 18 months, portfolio intensity declined to 165 gCO2/km.

Consumer Lender (Credit Cards and Personal Loans, $8B portfolio)

Challenge

AASB S2 required Scope 3 Category 15 disclosure. 80% of portfolio was unsecured credit cards with no asset-level data. Needed spend-based method but lacked merchant category granularity.

Solution

Used NetNada spend-based approach: Exported quarterly credit card transaction data by merchant category code (MCC). Applied EEIO emission factors per MCC (e.g., restaurants 0.3 kgCO2/$, fuel 1.5 kgCO2/$, retail 0.5 kgCO2/$). Aggregated to portfolio level.

Result

Calculated financed emissions from credit cards: 120,000 tCO2e annually (PCAF Score 5 - low data quality but disclosed methodology). 15% of emissions from fuel purchases, 25% from air travel, 60% from general retail. Identified opportunity to launch carbon-linked credit card rewards.

SASB Disclosure Topics for Consumer Finance

Material sustainability topics beyond emissions that investors and stakeholders expect disclosed per SASB standards.

Financed Emissions (Motor Vehicle Loans)

environment

Calculate Scope 3 Category 15 emissions from auto loans and leases using PCAF methodology. Report tCO2e per $M loans outstanding and portfolio carbon intensity by vehicle type (ICE, hybrid, EV).

Selling Practices and Product Labeling

governance

Disclose marketing practices for green auto loans (preferential rates for EVs). Report clarity of APR disclosure and consumer complaint rates.

Data Security and Customer Privacy

governance

Track data breaches, customer records compromised, and compliance with consumer data protection regulations (CCPA, GDPR for cross-border operations).

Financial Inclusion and Capacity Building

social

Report lending to underserved populations, average loan size, and approval rates by demographic group. Monitor fair lending compliance.

Transition Risk in Auto Loan Portfolio

business model

Disclose % of loan portfolio for ICE vehicles vs EVs. Assess residual value risk as EV adoption accelerates and used ICE vehicle values decline.

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.

Consumer Finance FAQs

Common questions about carbon accounting for this industry

How do you calculate financed emissions for an auto loan using PCAF?
PCAF Motor Vehicle Loan formula: (1) Determine annual use-phase emissions: km driven/year × Fuel consumption (L/100km) ÷ 100 × Emission factor (2.3 kgCO2/L for gasoline, 2.7 for diesel). (2) Calculate attribution factor: Outstanding loan balance ÷ Vehicle value. (3) Financed emissions = Attribution × Annual emissions × Loan term years. Example: $20,000 outstanding on $40,000 vehicle (50% attribution), 15,000 km/year, 8L/100km gasoline → 15,000 × 0.08 × 2.3 = 2,760 kgCO2/year × 50% = 1,380 kgCO2/year financed.
What fuel economy data source should we use for vehicle emissions?
Primary sources: (1) EPA fuel economy database (US) via VIN lookup - includes combined mpg and annual fuel cost. (2) Euro NCAP / WLTP ratings (EU) for European vehicles. (3) Manufacturer specifications if VIN not matched. Convert to emissions: mpg → L/100km → multiply by 2.3 kgCO2/L. For EVs: kWh/100km × Grid emission factor (e.g., 0.6 kgCO2/kWh Australia). Update annually as grid decarbonizes.
Should we include manufacturing emissions of the vehicle in financed emissions?
PCAF methodology focuses on use-phase emissions (fuel consumption during loan term) as primary metric. Manufacturing emissions (8-12 tCO2 for ICE sedan, 15-20 tCO2 for EV including battery) can be optionally included if lender financed vehicle purchase. If included, attribute: (Outstanding balance ÷ Purchase price) × Manufacturing emissions. Most lenders report use-phase only for comparability.
How do you handle vehicle leases differently from loans?
Leases use same PCAF motor vehicle methodology but attribution is typically 100% during lease term (lender owns vehicle). After lease end: if customer buys out, becomes loan attribution; if returned, lender attributes 0% (no longer financed). Residual value risk matters for carbon accounting: declining used ICE values may increase lease losses. Track separately: 'Leased vehicles in portfolio' vs 'Financed vehicles (loans)'.
Can we get credit for offering green auto loan products with preferential rates for EVs?
PCAF measures financed emissions (actual impact), not lending policies. Green auto loan products affect financed emissions indirectly by increasing EV loan origination %. Track separately: (1) Financed emissions (PCAF Scope 3 Category 15) showing portfolio carbon intensity. (2) Avoided emissions (non-PCAF metric) = (ICE baseline emissions - actual EV emissions) for green loans. Marketing claim: 'Customers who chose our green auto loan avoided X tonnes CO2 vs average ICE vehicle'.

Track Auto Loan and Consumer Credit Financed Emissions with PCAF

See how consumer lenders calculate vehicle use-phase emissions, measure portfolio decarbonization, and report PCAF-compliant financed emissions—automated from loan data.

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