During the week of 22 September 2025, States once again met in Vienna under Working Group III (WGIII)...
The global transition to renewable energy systems will be mineral intensive and, under the current linear economy conditions,...
To support the achievement of global carbon net neutrality by mid-century, public and private financial institutions must calculate their financed emissions using a harmonized carbon accounting methodology. Accurate, consistent, and comparable data on emissions and emissions reductions from financed investment projects is essential for financial institutions to set mitigation targets, devise plans to decarbonize their portfolios, and monitor progress. Obtaining this data requires a harmonized carbon accounting method applicable across countries, companies, projects, materials, and products.
Emissions disclosures initiatives and requirements are proliferating, but currently do not ensure harmonization of carbon accounting methods. Applying the various accounting methods permitted by emissions reporting initiatives and requirements leads to different calculated outcomes. Acknowledging this problem, multilateral development banks (MDBs) and private financial institutions have taken steps toward harmonizing carbon accounting.
Transparency of carbon emissions is high on the agenda for the MDBs. Formed by a group of major MDBs in 2012, the International Financial Institutions Technical Working Group (IFITWG) has since produced a dataset of emissions factors for electricity grids across 240 geographic areas and published an interim guideline to harmonize carbon accounting.
There remains a gap to be filled for MDBs to harmonize carbon accounting of financed investments. MDBs must overcome barriers including the allocation of specific funds as ‘climate finance’ rather than holistically evaluating the climate impacts of all activities; the use of different methods by different banks to account for the emissions of financed projects without demonstrating the comparability of outcomes; and the lack of specificity within harmonization initiatives. The IFI TWG’s interim guideline, for example, provides a base methodology, but gives institutions significant flexibility in calculating emissions.
Many initiatives encourage private financial institutions to account for financed emissions, but do not seek to harmonize accounting methods. Initiatives such as the Net Zero Asset Owner Alliance (NZAOA), Climate Action 100+, and the Net Zero Investment Framework help mainstream carbon accounting in private finance. However, they do not promote harmonization, by referring to various methods, including the Greenhouse Gas (GHG) Protocol, the Science-Based Targets Initiative, the Investor Energy & Climate Action Toolkit (InvECAT), the Partnership for Carbon Accounting Financials (PCAF), and the Task Force on Climate-Related Financial Disclosures (TCFD).
Certain standards for private financial institutions may lead to greater levels of carbon accounting harmonization, without guaranteeing it. For example, by allowing only one core accounting framework (GHG Protocol), PCAF’s Global GHG Accounting and Reporting Standard for the Financial Industry increases the level of harmonization. However, since the standard and the GHG Protocol itself leave room for variability in their methodologies, they do not guarantee harmonization.
Public and private financial institutions need a rigorous, thorough, and harmonized carbon accounting methodology applied across sectors, with sector-specific guidance. The harmonization of emissions accounting for mineral and industrial supply chains is especially significant due to their high emission intensity. The Coalition on Materials Emissions Transparency (COMET)—formed by the Columbia Center on Sustainable Investment (CCSI), RMI, and the Payne Institute for Public Policy at the Colorado School of Mines, in partnership with the Secretariat of the United Nations Framework Convention on Climate Change (UN Climate Change)—is developing a standard GHG calculation framework for mineral and industrial supply chains, integrating existing methodologies.
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