Equifax UK has launched the Financed Emissions CalculatorTM, utilising Equifax fully cloud-native infrastructure to help streamline sustainability reporting requirements and provide more accurate and timely data delivery. This new solution will enable lenders to make more informed decisions to align net-zero targets with lending and investment strategies. In partnership with environmental data technology company CienDos, the solution will help transform how financial institutions manage their financed emissions calculations and meet increasing sustainability disclosure requirements.    

This first-to-market solution aims to transform the manual, time-consuming and error-prone processes of calculating financed emissions into an automated system designed to support   regulatory-compliance. By combining Equifax commercial credit insights with CienDos’ advanced emissions data methodologies, the blended data will ensure that the emission calculations from every credit line of banks, lenders and other financial entities has a robust, auditable and transparent carbon value based on sector-specific emission factors. 

Financed emissions

Financed emissions refer to the greenhouse gas emissions indirectly attributed to financial institutions via their lending and investment activities. These emissions are generated by the activities of companies or projects that banks, asset managers, insurers and others fund, but not by the financial institutions themselves. The lending and investing portfolio of a financial institution typically accounts for up to 95% of their total carbon emissions, and therefore makes up the vast majority of their Scope 3.15 reporting requirements.

With increasing climate-related disclosure requirements such as IFRS S2, many banks are currently managing financed emissions using traditional methods such as manual calculations using high-level estimations. However, these approaches come with significant limitations and often lack granularity, accuracy and data traceability, limiting the ability to track real-time emissions across a portfolio or project future scenarios. The Financed Emissions CalculatorTM aims to solve this challenge, helping financial institutions to report, manage and, ultimately, reduce their carbon footprint with improved accuracy, traceability and efficiency.

Brad Davies, ESG Product Manager at Equifax UK, said: “The role of financial institutions in helping to combat climate change is gaining significant attention, but indirect financed emissions associated with loans and other credit lines are among the most complex to track. By integrating environmental data with leading financial risk assessments, the Financed Emissions CalculatorTM empowers UK lenders to measure and mitigate their climate impact. We’re excited to partner with CienDos to fill the knowledge gaps for clients with this first-to-market solution.”

Julia Salmond, Chief Executive at CienDos, said: “Equifax and CienDos have a shared vision to simplify the complex reporting requirements around financial firms’ carbon footprints. As a critical player at the heart of the UK financial ecosystem, Equifax’s extensive commercial credit data successfully combines with our own market-leading emissions data technology to help transform the management of portfolio emissions for firms, delivering greater accuracy and precision for their financed emissions reporting needs.”