Union Bank of India on Monday announced that it will become a signatory to the Partnership for Carbon Accounting Financials (PCAF).
This step aligns with the rising global emphasis on climate risk management and the latest draft guidelines issued by the Reserve Bank of India (RBI) on climate risk disclosures.
PCAF is a global partnership of financial institutions working to develop and implement a harmonized approach to assess and disclose greenhouse gas emissions associated with loans and investments, Union Bank said in a statement.
By joining PCAF, Union Bank of India shows its commitment to measuring and managing its financed emissions, a crucial aspect of climate risk management for banks, it said.
"Financed emissions, often referred to as Scope 3 emissions, represent the indirect emissions that result from a Bank's lending and investment activities. These emissions can significantly outweigh a Bank's operational emissions and pose substantial risks to its portfolio in the face of climate change and evolving regulations," it said.
The importance of tracking financed emissions has been emphasized by the RBI's recent draft guidelines on 'Disclosure framework on climate-related financial risks, 2024', issued on February 28, 2024, it said.
Related News |
RBI New Credit Rule Effective From Tomorrow: Check How It Empowers To Choose VISA vs Mastercard vs Rupay Card
The framework requires information on four main areas to be disclosed by regulated entities: metrics and targets, risk management, strategy, and governance.
The RBI's draft guidelines signal a shift towards more stringent climate risk reporting for Indian banks.
Related News |
Bank Locker Rules 2024: How To Choose The Right Bank? List Of Items Allowed, Locker Agreement And More