CFC strengthens commitment to sustainability by joining PCAF
The CFC has joined the internationally-recognised Partnership for Carbon Accounting Financials (PCAF), which will enable us to estimate the carbon footprint of our investments more accurately.
The PCAF is a collaboration between financial institutions worldwide to enable harmonised assessments and disclosures of greenhouse gas emissions (GHG) financed by loans and investments. With more than 350 financial institutions from six continents, the group is rapidly expanding in North America, Latin America, Europe, Africa and Asia-Pacific.
PCAF members currently include commercial banks, development banks, asset owners and managers and insurance companies, with total assets under management of more than USD 92 trillion. Since 2015 they have been collaborating to develop GHG accounting that aligns their organisations with The Paris Agreement on climate change.
For the CFC, joining the PCAF gives us access to a reliable methodology, alongside expertise and support to help us estimate the carbon footprint of the agribusinesses and organisations we finance. Using this information, we can pinpoint which investments are likely to be causing the greatest emissions and where we should work more closely with our investees to reduce them.
Sustainability is a key part of our investment decision making and we actively look to support organisations that are embedding it in their operations.
For example, we recently invested in Colombian circular economy business MUTA, which has developed a used cooking oil recycling platform that connects street collectors to secure formalised work in the recycling sector. Many of our investees, such as Kennemer Foods International, also run sustainable farming initiatives, such as agroforestry that promotes reforestation and climate resilience for smallholder farmers.
Dylan Hauser, Regional Lead of PCAF Africa said: “We are delighted that Common Fund for Commodities (CFC) is joining PCAF and look forward to deepening our collaboration with more intergovernmental financial institutions in the future. Our industry-led initiative was established to meet the need for a greater level of standardization in the measurement and disclosure of GHG emissions associated with financial activities. For financial institutions like CFC with operations and interests in Africa, where GHG emissions accounting is still maturing, the commitment could help drive this activity and the continent's journey towards a net-zero economy. As the PCAF Africa regional group continues to gather momentum, we welcome the commitment of more financial institutions that share our resolution to drive positive change in the region.”
Signing up to the PCAF commits the CFC to the annual reporting of our portfolio’s footprint within three years. This will become increasingly important as governments and institutions tighten their sustainability standards around Scope 3 emissions which encompass entire supply chains. It will also give us an opportunity to highlight the environmental value our investments are generating.
CFC Managing Director Amb. Sheikh Mohammed Belal said: “For us this is an important step towards delivering the full sustainability transparency as we consider our climate responsibility with utmost seriousness. We want to practice before we preach. Our resolve to make commodity value chains as climate neutral as possible gets a boost with our partnership with the PCAF”.
He added: “The agricultural sector is responsible for one fifth of GHG emissions, yet climate positive action in the sector has been slow. By committing to measure and report our portfolio’s carbon footprint, we accept the responsibility for our financed emissions and we pledge to engage with our investees and stakeholders to identify and support climate-smart practices and solutions, that will facilitate the overall decarbonisation of the sector.’’
To find out more about how our investments drive social and environmental value where it is most needed, contact managing.director@common-fund.org.