<p>New Delhi: Union Bank of India on Monday announced its decision to become a signatory to the Partnership for Carbon Accounting Financials (PCAF).</p><p>This step aligns with the growing global emphasis on climate risk management and the recent draft guidelines issued by the Reserve Bank of India (RBI) on climate risk disclosures.</p><p>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.</p><p>By joining PCAF, Union Bank of India demonstrates its commitment to measuring and managing its financed emissions, a crucial aspect of climate risk management for banks, it said.</p><p>"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.</p><p>The importance of tracking financed emissions has been underscored by the RBI's recent draft guidelines on 'Disclosure framework on climate-related financial risks, 2024', issued on February 28, 2024, it said.</p><p>The framework mandates regulated entities to disclose information on four key areas: governance, strategy, risk management, and metrics and targets.</p><p>The RBI's draft guidelines signal a shift towards more stringent climate risk reporting for Indian banks.</p>
<p>New Delhi: Union Bank of India on Monday announced its decision to become a signatory to the Partnership for Carbon Accounting Financials (PCAF).</p><p>This step aligns with the growing global emphasis on climate risk management and the recent draft guidelines issued by the Reserve Bank of India (RBI) on climate risk disclosures.</p><p>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.</p><p>By joining PCAF, Union Bank of India demonstrates its commitment to measuring and managing its financed emissions, a crucial aspect of climate risk management for banks, it said.</p><p>"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.</p><p>The importance of tracking financed emissions has been underscored by the RBI's recent draft guidelines on 'Disclosure framework on climate-related financial risks, 2024', issued on February 28, 2024, it said.</p><p>The framework mandates regulated entities to disclose information on four key areas: governance, strategy, risk management, and metrics and targets.</p><p>The RBI's draft guidelines signal a shift towards more stringent climate risk reporting for Indian banks.</p>