Equifax UK, a leader in financial data analytics, has introduced the Financed Emissions Calculator.
According to FinTech Finance, this innovative tool leverages Equifax’s fully cloud-native infrastructure to enhance sustainability reporting, providing lenders with more accurate and timely data. This development is in collaboration with CienDos, an environmental data technology company.
The new product aims to transform the traditionally manual, error-prone process of calculating financed emissions. By automating these calculations, Equifax UK supports regulatory compliance efforts and empowers financial institutions to align their net-zero targets with lending and investment strategies.
Equifax UK is renowned for its comprehensive commercial credit insights. By integrating these insights with CienDos’ advanced emissions data methodologies, the Financed Emissions Calculator ensures robust, auditable, and transparent carbon values for financial entities’ credit lines, tailored to specific sector emission factors.
Financed emissions refer to the indirect greenhouse gas emissions associated with a financial institution’s lending and investment activities. These emissions, crucial for Scope 3.15 reporting, often make up to 95% of a financial institution’s total carbon output.
Traditional methods of managing financed emissions, typically involving manual calculations and high-level estimations, suffer from significant drawbacks such as a lack of granularity and data traceability. The Financed Emissions Calculator addresses these challenges by enabling financial institutions to report, manage, and reduce their carbon footprint with enhanced accuracy and efficiency.
With escalating climate-related disclosure requirements like IFRS S2, many banks still rely on outdated methods to manage financed emissions. The innovative approach of the Financed Emissions Calculator aims to revolutionise this area by providing real-time emissions tracking and facilitating the projection of future scenarios.
Equifax UK ESG Product Manager Brad Davies remarked, “The role of financial institutions in helping to combat climate change is gaining significant attention, but indirect financed emissions associated with loans and other credit lines are among the most complex to track.
By integrating environmental data with leading financial risk assessments, the Financed Emissions Calculator empowers UK lenders to measure and mitigate their climate impact. We’re excited to partner with CienDos to fill the knowledge gaps for clients with this first-to-market solution.”
CienDos Chief Executive Julia Salmond added, “Equifax and CienDos have a shared vision to simplify the complex reporting requirements around financial firms’ carbon footprints. As a critical player at the heart of the UK financial ecosystem, Equifax’s extensive commercial credit data successfully combines with our own market-leading emissions data technology to help transform the management of portfolio emissions for firms, delivering greater accuracy and precision for their financed emissions reporting needs.”
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