Financed emissions are the greenhouse gas emissions attributed to a financial institution — a bank, pension fund, or asset manager — through the loans, bonds, and equity stakes it holds. When a bank lends money to an oil company or a coal plant, a share of that company’s emissions is assigned to the bank’s portfolio. For an individual, financed emissions represent the estimated CO₂e generated by economic activity funded with their deposits and investments. According to the Partnership for Carbon Accounting Financials (PCAF, 2023), the average US bank deposit carries an estimated emission intensity of around 0.24 kg CO₂e per dollar held per year — meaning a $10,000 current account balance corresponds to roughly 2.4 tons CO₂e per year in estimated financed impact.
These figures are estimates based on portfolio-level data, not verified personal emissions. The methodology is evolving as banks improve disclosure under frameworks including PCAF, TCFD, and the EU’s CSRD.
Where the concept comes from
The GHG Protocol Corporate Standard, maintained by the World Resources Institute and WBCSD, classifies emissions into three scopes. Scope 1 covers direct emissions from owned operations. Scope 2 covers purchased energy. Scope 3 covers all other indirect emissions across a company’s value chain — including, for financial institutions, the emissions of the companies they finance. This Scope 3 Category 15 — investments — is where financed emissions sit.
The Partnership for Carbon Accounting Financials (PCAF) was established in 2015 by a group of Dutch financial institutions and published its Global GHG Accounting and Reporting Standard for the Financial Industry in 2020, with version 3 released in 2023. PCAF v3 covers six asset classes: listed equity and bonds, business loans, mortgages, motor vehicle loans, project finance, and commercial real estate. It is now the most widely adopted methodology for financial institution emissions reporting, with over 500 financial institutions representing more than $90 trillion in assets as signatories as of 2024.
The concept also appears in the Task Force on Climate-related Financial Disclosures (TCFD) framework, which recommends that financial institutions disclose financed emissions as part of their climate-related risk reporting. The EU’s Corporate Sustainability Reporting Directive (CSRD), which entered force in 2024, requires large EU companies and financial institutions to disclose Scope 3 Category 15 emissions under the European Sustainability Reporting Standards (ESRS E1). This is expected to produce significantly more granular bank-level data through 2025 and 2026 as the first reporting cycle completes.
$10,000 in a standard US bank ≈ 2.4 tons CO₂e per year
Based on the GreenFi / Project Drawdown average banking emission intensity of 0.24 kg CO₂e per dollar held per year (PCAF methodology). This is an estimated financed impact — not a verified personal Scope 3 figure. Switching to a green or fossil-free bank reduces this estimate to approximately 0.057 kg CO₂e/$-yr.
How financed emissions are calculated
PCAF uses an attribution approach: each financial institution is assigned a proportional share of a borrower’s or investee’s total emissions, based on the institution’s financing as a share of the company’s total capital. For a loan, this is the outstanding loan balance divided by the borrower’s total assets. For equity, it is the value of the equity stake divided by the company’s enterprise value including cash.
At the individual level, the same proportional logic applies. If a bank has total assets of $1 trillion and total financed emissions of $240 billion kg CO₂e per year, the emission intensity is 0.24 kg CO₂e per dollar of assets. A depositor with $8,000 in that bank is proportionally attributed 1.92 tons CO₂e per year. This is the approach used in Decarb’s calculator, applied to the user’s entered bank balance and the applicable emission intensity for their bank type and locale.
PCAF distinguishes between Part A (balance sheet financing — loans, equity, bonds held on a bank’s own book) and Part B (facilitated emissions — off-balance-sheet underwriting and syndication activity). Most published bank figures cover Part A only. For large systemic banks that underwrite significant volumes of fossil fuel bonds and equity issuances, Part B can be comparable in scale to Part A, meaning published financed emissions figures for these institutions may materially understate total climate impact. Research by the Rainforest Action Network (Banking on Climate Chaos, 2024) estimates that the 60 largest global banks provided over $6.9 trillion in financing to fossil fuel companies between 2016 and 2023.
Part A vs Part B: why published figures may understate the picture
PCAF Part A covers loans and investments held on a bank’s balance sheet. Part B covers facilitated emissions — bonds underwritten, IPOs managed, and syndicated loans arranged but not held. For large investment banks such as JPMorgan, Citigroup, and Bank of America, underwriting and syndication volumes are large. The Banking on Climate Chaos 2024 report estimates total fossil fuel financing (Part A + Part B) for these institutions to be significantly higher than balance-sheet-only figures suggest. Decarb’s calculator uses Part A only, consistent with current PCAF standard disclosure, and notes this limitation in the calculator UI.
Estimated financed emissions by bank type and locale
Emission intensity varies substantially between bank types. Large US commercial banks with significant fossil fuel lending portfolios carry higher intensities than community banks, credit unions, or certified B Corp banking institutions. The table below shows estimated banking emission intensities by institution type, derived from GreenFi methodology, PCAF v3 regional data, and the MotherTree Bank League Table (2023) for UK institutions.
| Bank type | Locale | Est. kg CO₂e per $1 held per yr | Basis |
|---|---|---|---|
| Standard US commercial bank | US | ~0.240 | GreenFi / Project Drawdown, PCAF Part A |
| Green / fossil-free US bank | US | ~0.057 | GreenFi / GABV certified institutions |
| Standard EU bank (avg) | EU | ~0.155 | Carbone 4 / ECB portfolio data (−43% 2018–2023 adj.) |
| Green EU bank (e.g. Triodos) | EU | ~0.045 | GreenFi / GABV; EU Taxonomy aligned lending |
| Standard investment portfolio | US / EU | ~0.033 | GHG Protocol Cat. 15 / PCAF v3 listed equity |
| Green / ESG investment portfolio | US / EU | ~0.017 | GreenFi / PCAF v3; SFDR Article 9 fund average |
Sources: GreenFi methodology; PCAF Global GHG Accounting Standard v3 (2023); Carbone 4 French banking analysis; ECB climate-related financial disclosures (November 2025); MotherTree Bank League Table 2023. All figures are estimates. Individual bank intensities vary significantly — see your bank’s TCFD or CSRD disclosure for institution-specific data.
How financed emissions compare to other footprint categories
For many people, estimated financed emissions from banking and investments are a meaningful share of total personal estimated footprint — often comparable to home energy use or diet, and sometimes larger. The US Federal Reserve Survey of Consumer Finances (2022) puts the median US adult investment balance at approximately $87,000. At a standard investment emission intensity of 0.033 kg CO₂e per dollar per year, that implies roughly 2.9 tons CO₂e per year — comparable to driving a mid-size petrol car 8,500 miles. Switching that portfolio to an ESG-screened fund with a 0.017 kg CO₂e intensity would reduce estimated financed emissions from investments by approximately 1.4 tons CO₂e per year.
Banking balances produce smaller absolute numbers than investment portfolios — a $8,000 checking account at 0.24 kg CO₂e/$-yr generates roughly 1.9 tons CO₂e — but the emission intensity per dollar is much higher, because bank lending involves direct financing of business operations rather than ownership stakes in publicly listed companies. Switching from a large commercial bank to a GABV-certified green bank could reduce the banking component by around 1.7 tons CO₂e for that balance alone.
These are estimates with significant uncertainty. PCAF rates the data quality of deposit-based emission calculations at its lowest confidence level (Data Quality Score 5 of 5, where 1 is highest quality) because deposit balances are not allocated to specific loans, and bank lending portfolios are disclosed at aggregate level rather than per-depositor. The figures should be treated as order-of-magnitude indicators, not precise personal emissions. Decarb’s calculator labels this category ‘estimated financed impact’ rather than ‘financed emissions’ to reflect this epistemic limitation consistently with PCAF’s own framing.
What you can do about financed emissions
Switch to a certified green bank. In the US, the Global Alliance for Banking on Values (GABV) certifies institutions that direct lending toward sustainable and community-focused activities. Examples include Amalgamated Bank, Beneficial State Bank, and Spring Bank. Switching a $10,000 balance from a standard commercial bank to a GABV-certified institution reduces estimated banking emissions by approximately 1.8 tons CO₂e per year at current intensity estimates.
Review your investment portfolio’s emission intensity. Many pension providers and investment platforms now publish weighted average carbon intensity (WACI) data for their funds. EU SFDR Article 9 funds have mandatory principal adverse impact disclosures including financed emissions. Shifting to low-carbon index funds or Article 9 funds reduces estimated financed impact from investments, though the magnitude depends on portfolio size and fund composition.
Ask your employer about pension fund emissions. For most employees, the largest investment balance they hold is their pension or 401(k). Many large pension funds have adopted net-zero commitments and publish financed emissions data. If yours does not, engagement via the plan’s investment committee or via proxy voting platforms is possible. Make My Money Matter (UK) and Ceres (US) are organisations that aggregate and compare pension fund climate performance.
Check your bank’s TCFD or CSRD disclosure. Most large banks now publish climate-related financial disclosures aligned to the TCFD framework. These include Scope 3 Category 15 financed emissions data, though methodology and coverage vary. Looking for the financed emissions figure in tonnes CO₂e per million dollars or euros of loans outstanding gives a basis for comparison between institutions. The Banking on Climate Chaos annual report (Rainforest Action Network) provides a ranked comparison of the largest global banks by fossil fuel financing volume.
Frequently asked questions
What are financed emissions?
Financed emissions are the greenhouse gas emissions attributed to a financial institution — bank, pension fund, or asset manager — through the loans, bonds, and equity positions it holds. They are classified as Scope 3 Category 15 under the GHG Protocol. At the individual level, financed emissions represent a proportional share of a bank’s or fund’s portfolio emissions, based on the depositor’s or investor’s balance relative to total institutional assets. The Partnership for Carbon Accounting Financials (PCAF) provides the most widely adopted methodology for calculating them.
How much CO₂e does a typical bank account generate in financed emissions?
Based on GreenFi and Project Drawdown data using PCAF methodology, the average US standard commercial bank carries an estimated intensity of 0.24 kg CO₂e per dollar held per year. A $10,000 checking account balance therefore corresponds to approximately 2.4 tons CO₂e per year in estimated financed impact — comparable to driving a petrol car around 7,000 miles. This is an estimate with high uncertainty; PCAF rates deposit-based calculations at its lowest data quality tier because individual deposits are not allocated to specific loans.
Is there a difference between financed emissions from banking and investing?
Yes — both in scale and methodology. Banking emission intensity is higher per dollar (approximately 0.24 kg CO₂e/$-yr for a standard US bank) because bank lending directly finances company operations. Investment portfolio intensity is lower per dollar (approximately 0.033 kg CO₂e/$-yr for a standard mixed portfolio) but total amounts can be larger because investment balances tend to be higher. For a typical US adult with $8,000 in a bank and $87,000 invested (Fed SCF 2022 medians), investments produce the larger total estimated financed impact despite the lower per-dollar intensity.
Why do different carbon calculators show different financed emissions figures?
Financed emission calculations vary because the underlying data is sparse, methodology choices differ, and the concept of personal attribution of institutional emissions is genuinely contested. Some calculators exclude finance entirely. Others use different PCAF data vintages, apply different allocation approaches, or include facilitated emissions (Part B) in addition to balance sheet financing (Part A). Decarb uses PCAF v3 Part A, GreenFi methodology for banking, and GHG Protocol Category 15 for investments, and labels the output ‘estimated financed impact’ to reflect the proxy nature of the calculation.
What is PCAF and why does it matter for financed emissions?
PCAF — the Partnership for Carbon Accounting Financials — is the leading standard-setting body for financial institution greenhouse gas accounting. Founded in 2015 by Dutch banks and formalised globally in 2020, PCAF v3 (2023) defines how to calculate financed emissions across six asset classes including loans, equity, bonds, and mortgages. Over 500 financial institutions representing more than $90 trillion in assets have committed to reporting using PCAF methodology. It provides the attribution formulas, data quality scoring, and guidance that underpin most serious financed emission calculations, including those used by Decarb.
See your finance category
How much do your bank and investments contribute to your footprint?
The Decarb calculator includes a finance category alongside transport, energy, food, and goods — with adjustable balance sliders so you can see how switching bank or investment type affects your total. Free, no account required.
Methodology note
Banking emission intensities in this post use the proportional allocation model: a depositor’s attributed financed impact equals their balance multiplied by the bank’s aggregate emission intensity (total financed emissions divided by total assets). This follows the GreenFi/MotherTree PCAF-aligned approach. It is not a strict personal Scope 3 calculation — deposits are fungible and cannot be traced to specific loans. Decarb therefore presents this as ‘estimated financed impact’ throughout.
US standard banking factor (0.240 kg CO₂e/$-yr) sourced from Project Drawdown via GreenFi, PCAF Part A. EU standard banking factor (0.155 kg CO₂e/€-yr) revised from 0.24 using Carbone 4 French banking data adjusted for ECB portfolio decarbonisation data (−43% portfolio carbon intensity 2018–2023). Investment factors (0.033 standard / 0.017 green) from GHG Protocol Category 15 and PCAF v3 listed equity and bond guidance. Full factor table and derivations at decarb.co/methodology.
Sources
- PCAF (Partnership for Carbon Accounting Financials). Global GHG Accounting and Reporting Standard for the Financial Industry, version 3. 2023. carbonaccountingfinancials.com
- GHG Protocol Corporate Standard. Scope 3 Category 15: Investments. World Resources Institute / WBCSD. ghgprotocol.org
- GreenFi / Project Drawdown. Banking emission intensity methodology and US institution data. greenfi.com
- Carbone 4. French bank financed emissions analysis. carbone4.com
- European Central Bank. Climate-related financial disclosures, November 2025. ecb.europa.eu
- MotherTree. Bank League Table 2023: UK financed emissions comparison. mothertree.com
- Rainforest Action Network et al. Banking on Climate Chaos 2024. bankingonclimatechaos.org
- Federal Reserve Board. Survey of Consumer Finances 2022. federalreserve.gov
- Task Force on Climate-related Financial Disclosures (TCFD). Recommendations of the TCFD, 2017 (updated 2021). fsb-tcfd.org
- European Commission. Corporate Sustainability Reporting Directive (CSRD), ESRS E1. 2023.