(This article was published on 20 December 2022 and updated on 12 December 2025)
What's the issue?
The measurement of financed and facilitated emissions is a complex and fast-moving area. These emissions represent key metrics for commercial banks, insurance companies and asset managers (together, ‘financial institutions’). Those metrics help users to understand what the financial institution is funding, and therefore both its ability to influence global emissions and its exposure to transition risk.
Many global banks currently quantify and disclose financed emissions for a subset of their lending exposures – i.e. those in specific sectors. However, measurement methodologies and practices continue to evolve and vary, and banks can find it challenging to give users an end-to-end view of total financed and facilitated emissions at this stage. Most do not yet disclose facilitated emissions.
Emissions that financial institutions fund are an important area where the ISSB is balancing the drive to consistency with acknowledging that calculation methodologies need to evolve in practice.
What are the requirements?
The climate standard1 requires financed emissions disclosures for companies with commercial banking, insurance or asset management activities. To avoid restricting the development of industry practice, the measurement requirements are high-level, and companies need to disclose the methodology used.
When the climate standard was issued, facilitated emissions disclosures for investment banking and brokerage activities, and emissions associated with insurance (or re-insurance) underwriting portfolios (insurance-associated emissions), were highlighted as areas for future consideration.
In response to feedback from stakeholders – including regulators, preparers and investors – the International Sustainability Standards Board (ISSB) has issued targeted amendments to the climate standard which include clarifying the requirements for disclosing financed emissions.
The financed emissions disclosure requirements include the following.
Reliefs are available, including a later effective date for all Scope 3 disclosures and inclusion of value chain information with non-aligned reporting periods.
What’s the impact?
The requirement to report on financed emissions brings with it various complexities, including determining appropriate measurement methodologies and overcoming issues with incomplete, outdated or inaccurate data. Our benchmarking analysis showed that data challenges currently hinder the quantification of financed and facilitated emissions, and comparability, across banks.
Financial institutions reporting these metrics will need a lot of data – it may take many years to gather relevant data and develop effective reporting, so they should make it a priority now.
Actions for management
- Familiarise yourself with the requirements for commercial banking, asset management and insurance activities.
- Understand how the ISSB’s amendments to the climate standard affect your company.
- Work with a specialist to understand how the climate standard applies to your lending or investment portfolio and what data will be required.
- Consider the systems, processes and controls needed to support your reporting.
1 IFRS S2 Climate-related Disclosures.
© 2025 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.