In PCAF, an asset class is a group of financial instruments for which the standard sets common rules: what counts as the outstanding amount, what it is divided by and whose emissions are attributed. A bank's or fund's portfolio is broken down by asset class, financed emissions are calculated for each class separately, and the results are then added up.
Why split a portfolio into asset classes
A loan to a factory, a stake in a listed company and a home mortgage finance completely different things. In the first case, the financier takes a share of the whole company's emissions; in the second, also of a company's emissions, but through its market value; in the third, of the emissions of a specific building. That is why the general idea of PCAF (see financed emissions) is applied differently depending on the instrument.
The ten PCAF asset classes
The third edition of Part A (December 2025) describes ten asset classes. Each has its own attribution logic and its own data set; for the current text of the standard, see regulatory documents.
| No. | Asset class | Calculation logic | Key data |
|---|---|---|---|
| 1 | Listed equity and corporate bonds | Share of company value (EVIC) × company emissions | EVIC, Scope 1–3, position value |
| 2 | Business loans and unlisted equity | Share of financing × borrower emissions | Balance sheet, revenue, debt, emissions |
| 3 | Project finance | Share of debt or equity × project emissions | Project value, debt, equity, MRV data |
| 4 | Commercial real estate | Share of financing × property emissions | Value, floor area, energy consumption |
| 5 | Mortgages | Share of loan × home emissions | Outstanding loan, value, energy consumption |
| 6 | Motor vehicle loans | Share of loan × vehicle emissions | Model, mileage, fuel or electricity |
| 7 | Use-of-proceeds financing | Attribution by the financed assets or projects | Allocation of proceeds, metrics, baseline scenario |
| 8 | Securitizations and structured products | Look-through to the pool or an approximation | Tranche, underlying assets, ownership share |
| 9 | Sovereign debt | Share of government financing × national emissions | GDP (PPP), territorial emissions |
| 10 | Sub-sovereign debt | Share of regional financing × regional emissions | Regional revenue or GRP, inventory, debt |
How the rules differ
Corporate instruments. For listed companies, the financier's share equals the outstanding amount divided by EVIC (enterprise value including cash). For private companies, the sum of equity and debt is used instead of EVIC. A numerical example is in Attribution formula.
Project finance. The emissions attributed are those of the specific project, not of the entire sponsoring company. If the project reduces emissions (a solar plant or heat pumps, for example), the bank can also report the avoided emissions separately, without mixing them with financed emissions.
Real estate and mortgages. Here the property is at the center. Emissions are calculated from the building's energy consumption: electricity, heat and gas. The bank's share is determined by the ratio of the loan amount to the property value.
Motor vehicle loans. Emissions are calculated from the vehicle's fuel consumption or mileage.
Sovereign and sub-sovereign debt. The financier takes a share of a country's or region's emissions in line with its share of their debt; the rules for these classes differ from the corporate ones.
Use of proceeds and securitization. For green bonds and earmarked loans, emissions are attributed according to the assets the money goes to; for securitized pools, through the underlying assets or an approximation.
Where a bank should start
- Break the portfolio down by asset class and estimate each class's share of the total outstanding amount.
- Start with the largest and most carbon-intensive positions: these are usually loans to industrial and energy companies.
- For each position, determine what emissions data is available and assign a quality score; see the 1–5 scale.
- Where there is no data, use estimates based on physical or economic activity, and plan to collect data from clients.
Example: one client, different asset classes
A company takes a working capital loan from its bank, plus a project loan to build a boiler house. The working capital loan falls under business loans: the bank takes a share of the whole company's emissions. The project loan falls under project finance: the boiler house's emissions are attributed. The same company appears twice in the bank's report, but under different rules and without the same emissions being double counted within a class.
How it works in the platform
- The PCAF contour is still in development and marked “Soon”: the platform cannot yet break a portfolio down by asset class.
- Facility-level GHG accounting already works: each building or site is set up under Facilities, and electricity, heat and fuel consumption is entered month by month in Data entry.
- For real estate and projects, this facility-level structure is exactly what helps: emissions are visible for each building, while the company's annual totals and regions on the map are in GHG analytics.
Frequently asked questions
Can the whole portfolio be calculated with one formula?
No. The general logic is the same (the share of investment multiplied by emissions), but what serves as the denominator and whose emissions are used depend on the asset class. Mixing the rules distorts the result.
Where does a loan go if its purpose is unknown?
A loan without a specified use of proceeds is usually treated as financing for the company as a whole, that is, under the rules for corporate instruments. For the exact criteria, see the current edition of the standard.
Do all asset classes have to be covered at once?
The standard aims for full coverage, but in practice banks start with the most significant asset classes and widen coverage step by step, disclosing what share of the portfolio has already been calculated.