Union Bank of India Joins Global Carbon Accounting Initiative

• 10 Sep 2024

On 9th September, 2024, Union Bank of India became the first major Indian bank to sign the Partnership for Carbon Accounting Financials (PCAF), aligning with global efforts to address climate risk.

• Union Bank of India has announced its commitment to the Partnership for Carbon Accounting Financials (PCAF), a global initiative for financial institutions to assess and disclose greenhouse gas emissions linked to their loans and investments.
• This move aligns with growing international focus on climate risk management and the Reserve Bank of India’s (RBI) recent draft guidelines on climate risk disclosures.
• By joining PCAF, Union Bank demonstrates its dedication to measuring and managing financed emissions, also known as Scope 3 emissions, which result from a bank’s lending and investment activities.
• Financed emissions typically outweigh a bank’s operational emissions and pose significant risks to portfolios, particularly amid evolving climate regulations.
• The RBI’s draft guidelines, issued in February 2024, emphasize the need for Indian banks to disclose information on governance, strategy, risk management, and metrics related to climate risk.
• These guidelines represent a shift towards more stringent climate risk reporting and underscore the importance of tracking and managing financed emissions in the banking sector.