What are insurance-associated emissions?
Insurance-associated emissions attribute part of an insured customer's greenhouse gas (GHG) emissions to a (re)insurer's underwriting portfolio. PCAF Part C provides methods for commercial, project, personal motor and treaty reinsurance. The result is a supplementary note within Scope 3 Category 15.
Why do insurance-associated emissions matter to you?
An insurer may ask for your company's revenue and emissions to calculate its portfolio figure. If revenue, emissions and policy cover different entities or periods, the insurer cannot reproduce the attribution or assign the right data-quality score.
How are insurance-associated emissions calculated?
For commercial lines, start with annual gross written premium, the total amount the customer owes for policies written in the period. Subtract external acquisition costs, such as outside broker fees, then divide by customer revenue. Multiply that attribution factor by the customer's annual emissions. PCAF requires Scope 1 and Scope 2. Include customer Scope 3 only when it is available as a reasonable, verifiable estimate, and report it separately from Scope 1 and Scope 2.
What mistakes should you avoid?
- Using the policy's liability limit instead of the premium in the numerator.
- Mixing parent revenue with subsidiary emissions.
- Adding the result to financed emissions.
- Hiding excluded lines of business or estimated customer data.
Are insurance-associated emissions the same as financed emissions?
No. Financed emissions arise from loans and investments. Insurance-associated emissions arise from underwriting risk without ownership or direct operational control. PCAF says the two figures cannot be added or compared directly.
Is PCAF insurance reporting mandatory?
PCAF describes its method as voluntary. A law, regulator, investor or company policy may create a separate reporting obligation, so confirm the requirement that applies to your (re)insurer.
What should you send when an insurer asks for data?
Send the insured entity name, reporting period, revenue, GHG inventory by scope, calculation method, verification status and source files. Confirm which policy and subsidiary the request covers before sharing figures.