In recent years, the focus on financed emissions—greenhouse gas emissions linked to the lending and investment activities of financial institutions—has intensified. As regulatory frameworks evolve, financial institutions are compelled to disclose their financed emissions accurately. This case study explores how a market research firm collaborated with a leading bank to enhance their understanding and reporting of financed emissions, aiming to align with emerging regulations and client expectations.

Client Background

The client, a prominent bank, recognized the growing importance of financed emissions in their operations. With increasing regulatory scrutiny and client demand for sustainable practices, they sought to improve their emissions reporting and develop strategies for reduction.

Business Challenges

Regulatory Compliance

The bank faced challenges in meeting evolving regulatory requirements for financed emissions disclosure.

Data Collection

Gathering accurate data on emissions from clients was complex due to inconsistent reporting practices across sectors.

Stakeholder Expectations

There was pressure from stakeholders, including investors and clients, for transparent and comprehensive emissions reporting.

Methodological Uncertainty

The bank struggled with selecting appropriate methodologies for calculating financed emissions that would satisfy both regulatory bodies and internal standards.

Integration Across Departments

Coordinating efforts among various departments (finance, sustainability, risk) to align on emissions reporting proved difficult.

Solutions

Regulatory Analysis: Conducted an in-depth analysis of current and upcoming regulations regarding financed emissions to help the bank stay ahead of compliance requirements.

Data Strategy Development: Assisted in creating a robust data collection strategy that leveraged existing databases and industry benchmarks to improve accuracy in emissions reporting.

Stakeholder Engagement Plan: Developed a comprehensive engagement plan to communicate the importance of financed emissions to stakeholders, enhancing transparency and trust.

Methodology Guidance: Provided recommendations on adopting the Partnership for Carbon Accounting Financials (PCAF) methodology for consistent and credible emissions calculations.

Cross-Departmental Workshops: Facilitated workshops that brought together teams from finance, sustainability, and risk management to foster collaboration and streamline reporting processes.

Continuous Monitoring Framework: Established a framework for ongoing monitoring of financed emissions, allowing the bank to adapt to changes in regulations and stakeholder expectations effectively.

Business Impact

The collaboration resulted in significant improvements for the bank:

  • Enhanced compliance with regulatory requirements led to a smoother audit process.
  • Improved data accuracy increased stakeholder confidence in the bank’s sustainability efforts.
  • Adoption of standardized methodologies streamlined reporting processes across departments.
  • The bank established itself as a leader in sustainable finance, attracting new clients interested in environmentally responsible banking practices.
  • Ongoing monitoring allowed the bank to proactively address potential risks associated with financed emissions.

Conclusion

This case study illustrates the critical role of Infiniti in helping financial institutions navigate the complexities of financed emissions reporting. By addressing regulatory challenges, enhancing data collection processes, and fostering cross-departmental collaboration, the bank was able to improve its sustainability practices significantly. As the demand for transparency and accountability grows, such partnerships will be essential for financial institutions striving to contribute positively to global climate goals while maintaining a competitive edge in the market.