如何在建築及建設行業應用PCAF S2標準
How can PCAF S2 standards be applied in the building and construction industry?

How can PCAF S2 standards be applied in the building and construction industry?

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       The Partnership for Carbon Accounting Financials (PCAF) started in 2015 with Dutch banks. It expanded to North America in 2018 and became global in 2019. PCAF helps financial institutions measure and report their greenhouse gas emissions. Its Global GHG Accounting Standard provides a clear way for these institutions to track and share information about the emissions related to their activities. It gives the truth and fair assessment of climate-related risks, associated with the Paris Conference, to contribute to the global goal of cutting down net-zero emissions by 2050.

 

       There are three Scopes of GHG Emissions according to PCAF: Scope 1, Scope 2, and Scope 3. Scope 1 covers all direct emissions, including fossil fuels and refrigerant losses. For buildings, the main source of Scope 1 emissions is the burning of fossil fuels and, to a lesser extent, biomass to produce heat for power generation, space heating, hot water, and cooking. Fuels in the built environment can be gaseous (e.g., natural gas), liquid (e.g., heating oil), or solid (e.g., coal and biomass).

 

       Scope 2 emissions are indirect and come from electricity, steam, heat, or cooling purchased by the organization. In buildings, the typical source of Scope 2 emissions is electricity consumption, with emissions from purchased heat or cooling also included, such as heat or cooling from district networks. Scope 2 emissions are calculated using either the location-based method, based on the average grid emissions intensity, or the market-based method, based on emissions associated with purchased generators.

 

       Scope 3 (Category 15) emissions can be defined as an ‘other indirect greenhouse gas emission, other than purchased energy-related GHG emissions, which is a consequence of an organization’s activities, but arises from GHG sources that are owned or controlled by other organizations. The boundary of scope 3 GHG emissions can be defined widely depending on the reporting goals, including upstream and downstream emissions from various parts of a value chain. In construction, Scope 3 plays an important role because it includes: Embodied carbon (Emissions from the manufacturing of construction materials - e.g., cement, steel), Supply chain emissions (Indirect emissions from the supply chain and contractors involved in the project), and End-use of buildings (Emissions from the use phase of the buildings after construction - e.g., energy use during building operation).

 

       The PCAF Standard offers a methodology for financial institutions to assess financed emissions from construction-related investments, including project finance, commercial real estate loans, and mortgages. In project finance, emissions from construction materials, on-site fuel use, and energy consumption are calculated based on the institution’s share in the project. This is crucial for large infrastructure projects where emissions are significant. For commercial real estate and mortgages, PCAF calculates emissions based on building energy performance during operation, helping institutions identify high-emission properties and prioritize investments in green, energy-efficient buildings with lower carbon footprints.

 

       Also, PCAF provides the methods to collect data and measure the amount of GHG emissions for each Scope to meet the requirement of reliability, accuracy, and transparency when disclosing the financial statement to the stakeholders. For Scope 1 and Scope 2, it is quite simple to calculate because they are related to energy (eg: fossil fuel, electricity, or heating/cooling), whether they are direct or indirect. For Scope 3, it is more difficult to measure because it is totally not related to energy. Scope 3 emissions pose greater challenges because they require data from third-party suppliers and contractors.

 

       PCAF recommends institutions rely on data provided by their suppliers regarding emissions from the materials used. When this data is unavailable, institutions can use proxy data or sector-specific emission averages to estimate Scope 3 emissions. To calculate the GHG emissions of Scope 3, the companies have to depend on their suppliers’ information about the emissions associated with their products. They can also use the services from third parties that provide consultant services about the amount of emissions from Scope 3 (based on the supplier’s location, industry standards, and market data). These services help ensure that GHG emissions are accurately disclosed to stakeholders, fostering transparency and reliability in emissions reporting

 

       For disclosure, PCAF also supports the ideas of the ISSB S2 Standard of how to disclose the financed emissions to meet the five criteria of Accounting (Completeness, Consistency, Relevance, Accuracy, and Transparency). ISSB S2 Standard expresses the idea of disclosure of climate-related issues such as climate-risk management or climate impacts on business. In the building and construction industry, PCAF helps financial institutions identify and manage climate risks by assessing the carbon intensity of their portfolios. For example, institutions can assess how exposed their investments are to transition risks like carbon pricing or energy efficiency regulations. Buildings with high energy consumption are more vulnerable to regulatory shifts, which may impose stricter energy standards, leading to higher operational costs. By using PCAF metrics, financial institutions can identify projects that are likely to face these risks and take action to reduce exposure.

 

       PCAF also supports the identification of low-carbon investment opportunities. Financial institutions can use PCAF’s emission intensity metrics to evaluate projects that align with green building certifications and have lower carbon footprints. For example, investing in sustainable construction materials or financing buildings with renewable energy systems can reduce financed emissions. Such projects are not only better positioned to comply with future regulations but also represent attractive opportunities for green loans and sustainability-linked bonds. PCAF methodologies also support scenario analysis, allowing institutions to assess how future climate policies might impact their construction portfolios. For instance, a shift towards low-carbon construction materials or stricter energy efficiency requirements could significantly reduce financed emissions, while helping financial institutions manage transition risks. This forward-looking approach is essential in preparing for the decarbonization of the construction industry.

 

       In conclusion, in the construction and building industry, the PCAF Standard helps financial institutions accurately identify and measure the GHG emissions from all activities occurring. Furthermore, it supports the disclosure of this industry to comply with the ISSB S2 standard, which leverages the investors to recognize the climate-related risks, low-carbon opportunities, or emissions challenges earlier. Also, it supports the global goal of net-zero by 2050.