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Definition

PCAF attribution factor

A PCAF attribution factor is the fraction of annual emissions allocated to a financial institution for a loan or investment, calculated with the numerator and denominator specified for the relevant asset class.

What is a PCAF attribution factor?

A PCAF attribution factor is the share of annual emissions allocated to a financial institution under a specified asset-class method. Under the PCAF Standard Part A, Chapter 5.2, the ratio applies to business loans and unlisted equity. It does not transfer emissions away from the borrower or investee.

Why does a PCAF attribution factor matter to you?

A lender or investor may ask for your reporting-date loan balance or investment value, balance sheet and emissions for the same period. If the outstanding amount or denominator is missing or dated differently, the requester cannot reproduce the attribution factor or financed emissions.

How is a PCAF attribution factor calculated?

The numerator and denominator depend on the asset class. For a private-company business loan, divide debt still owed after repayments by total equity plus current and long-term debt; set negative equity to zero. For unlisted equity, divide the value of the institution's holding by the same denominator. For a business loan to a listed company, divide the outstanding loan by enterprise value including cash (EVIC). Other asset classes use different denominators. Multiply the factor by the emissions covered by that method.

What mistakes should you avoid?

  • Using the original facility limit instead of the amount owed at the reporting date.
  • Leaving current debt out of total equity and debt.
  • Using private-company total equity and debt where PCAF requires EVIC for a listed company.
  • Mixing balance-sheet values, loan balances and emissions from different periods without explanation.

Is the outstanding amount the original loan value?

No. For a business loan, it is the debt still owed after repayments at the chosen year-end. The factor normally declines as the borrower repays the loan.

What should you send when a lender asks for the denominator?

Send the dated balance sheet showing total equity, current debt and long-term debt, plus the year-end outstanding loan balance. Identify the currency and explain any period mismatch.

Example

Suppose a food and beverage processor in Luzon, Philippines used 500,000 kWh of grid electricity during the reporting year. The Keslio dataset uses 0.7122 kg CO2/kWh from the Philippines Department of Energy's 2015-2017 National Grid Emission Factor for the Luzon-Visayas grid, specifically its simple operating margin factor.

Processor electricity emissions: 500,000 kWh x 0.7122 kg CO2/kWh = 356,100 kg CO2, or 356.1 tCO2. This older, CO2-only simple operating margin factor is a low-confidence proxy. Replace it with current, location-matched data before external reporting.

At year-end, a fund owns 25% of the processor's shares. The processor's balance sheet shows PHP 80 million of total equity and PHP 320 million of current and long-term debt. Under PCAF, the outstanding value of the fund's unlisted-equity holding is 25% x PHP 80 million = PHP 20 million. Total equity plus debt is PHP 400 million, so the attribution factor is 20 / 400 = 5%. The fund attributes 356.1 tCO2 x 5% = 17.805 tCO2 of these electricity emissions. This is one emissions component, not the processor's complete inventory.

Where it comes up

PCAF business loans and unlisted equity attribution principle and financed-emissions formulaPCAF Financed Emissions Standard, third edition, Chapter 5.2, pp. 56-58Official sourcePCAF outstanding amount and total equity plus debt rules for private companiesPCAF Financed Emissions Standard, third edition, Chapter 5.2, pp. 56-57 and footnotes 73, 75-77Official source

Related terms

Financed emissions

Financed emissions are the share of a borrower's or investee's gross GHG emissions allocated to a bank, fund or asset owner through the loans and investments it holds.

PCAF Standard

The PCAF Standard assigns financial activities to methods for measuring and disclosing emissions associated with loans, investments, capital-markets facilitation, and insurance underwriting.

EVIC for financed emissions

EVIC for financed emissions adds a listed company's year-end ordinary and preferred share market capitalisations, total debt and non-controlling interests without subtracting cash; PCAF uses it as a listed-company denominator in several attribution formulas.

PCAF data quality score

A PCAF data quality score ranks the inputs behind financed-emissions estimates from 1, the highest quality, to 5, the lowest, based on whether data are verified, reported, physically measured or economically estimated.

Portfolio carbon footprint

A portfolio carbon footprint sums the GHG emissions attributed to investments and usually divides that total by portfolio value to report tonnes of carbon dioxide equivalent per million invested.

Sources

Last verified 2026-08-21

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PCAF attribution factor Definition | Keslio