Financed Emissions in the GCC: A Practical PCAF Playbook for Attribution, Coverage, and Auditability

Financed emissions are the portion of a counterparty’s greenhouse gas emissions attributed to a financial institution’s loans and investments (Scope 3 Category 15: Investments). In the GCC, financed emissions programs most often break on three points: inconsistent attribution in syndicated and structured financing, uneven portfolio coverage, and weak auditability when evidence is scattered across PDFs, credit files, and spreadsheets. A defensible program standardizes attribution rules, expands coverage in waves, and stores source evidence so results are reproducible under assurance.

Key takeaways:

• Standardize attribution rules first, especially for syndicated exposure and structured products.
• Track “coverage” and “confidence” separately (portfolio share vs data quality).
• Expand asset-class coverage in waves, starting with high-signal segments.
• Treat auditability as a system design problem, not a spreadsheet problem.
• Document exclusions and any reliefs clearly and keep a plan to reduce them over time.

Why financed emissions is becoming a board metric in the GCC

Financed emissions is moving from a sustainability disclosure to a governance metric because it connects climate risk, capital allocation, and regulatory expectations in one number.

A practical signal of this shift is when institutions publish their financed-emissions methodology and explain perimeter, attribution approach, included asset classes, and how data quality is scored. Emirates NBD provides a GCC example in its methodology document, Financed Emissions Basis of Reporting 2024, which describes how the Group calculates Scope 3 Category 15 financed emissions aligned to PCAF, including attribution and how PCAF-aligned data quality scoring is assigned.

If you want a quick foundation on how standards fit together, see Coral’s Introduction to Carbon Accounting Protocols.

What changed recently and why it matters

PCAF’s 3rd edition (December 2025) closes common “coverage gaps”

The Partnership for Carbon Accounting Financials (PCAF) is the most widely used financed-emissions accounting standard. Its third edition (Dec 2025) expands the standard to cover more portfolio reality and reduces ambiguity in areas that historically produced inconsistent attribution and exclusions.

Practical implications for GCC portfolios include expanded methodologies for complex exposure types, clearer handling for additional asset classes, and optional methodology treatment for undrawn loan commitments. This matters in markets where syndicated loans, project finance, sukuk, and structured exposures can be meaningful parts of the book.

This post references PCAF’s updates as summarized in the PCAF Part A (2025) Executive Summary and the third-edition standard in PCAF Part A (2025) Standard.

ISSB targeted amendments to IFRS S2 (December 2025) clarify Category 15 boundaries

The International Sustainability Standards Board (ISSB) issued targeted amendments to IFRS S2 in December 2025. The IFRS Foundation notes these amendments are effective for reporting periods beginning on or after 1 January 2027, with early application permitted, subject to jurisdictional adoption.

Operationally, this pushes teams toward clearer Category 15 boundary setting and better transparency on what is included or excluded. The official announcement is in ISSB issues targeted amendments to IFRS S2, and the detailed text is in the December 2025 amendments to IFRS S2.

Part 1: Fixing attribution (the GCC reality: shared financing is common)

Attribution is where financed emissions either becomes coherent or becomes a set of conflicting numbers across teams and quarters.

Start with one rule: define the inventory perimeter before you debate attribution factors

Before you calculate anything, standardize which entities are in-scope, which balance sheet items and products are included, and what consolidation approach applies. This sounds basic, but many attribution disputes are actually perimeter disputes in disguise.

If your institution is regulated in Qatar, note that the Qatar Central Bank’s sustainability reporting requirements begin with annual financial years starting from 1 January 2026, as set out in the QCB Sustainability Reporting Framework.

Emirates NBD example: what “attribution-ready” documentation looks like

Emirates NBD’s Financed Emissions Basis of Reporting 2024 is a useful GCC benchmark for attribution discipline because it makes attribution decisions reviewable rather than implicit. Three elements are especially instructive for teams building their own financed-emissions system:

• It states the financed-emissions methodology alignment and how the bank interprets Category 15 measurement for its reporting boundary.
• It describes how attribution is applied and how PCAF-aligned data quality scoring is assigned.
• It clarifies the asset classes included in the current inventory, which reduces ambiguity about what is in-scope.

Use this as a practical test: if an auditor asked “show me how you treated syndicated loans and why,” could you point to one governed rule that is stable quarter to quarter?

Practical attribution checklist for GCC portfolios

1) Normalize “financing type” data across systems

Attribution breaks when the same exposure is labeled differently across source systems (credit, risk, finance, treasury). Standardize instrument taxonomy such as project finance vs corporate loans, revolvers vs term loans, trade facilities vs longer-tenor financing, and bonds, sukuk, and structured exposures.

2) Standardize syndicated exposure treatment

Choose one consistent approach and document it: what the attribution factor is based on (outstanding exposure, commitment, or a defined basis), how participations and secondary market holdings are treated, and how undrawn commitments are handled.

PCAF’s third edition expands guidance in areas that often show up as “edge cases” in syndicated and structured exposures, as summarized in the PCAF Part A (2025) Executive Summary.

3) Decide “edge cases” once, then reuse

Create an “edge-case library” with one approved decision per topic, such as use of proceeds vs general corporate purpose, securitisations and structured products, and sub-sovereign exposures and quasi-sovereign linkages.

4) Publish your attribution logic internally as governed policy

A short internal attribution policy that is stable quarter to quarter reduces restatements and supports assurance.

Where Coral fits: Coral can store attribution logic as governed calculation rules (by instrument and asset class), so teams stop reinterpreting policy in spreadsheets. See Emissions Management System and AI Carbon Management in the GCC.

Part 2: Expanding coverage without collapsing under data gaps

Coverage is where GCC institutions either mature quickly or stall for years. The key is to stop treating coverage as a single percentage.

Step 1: Separate “coverage” from “confidence”

Track two indicators: coverage (what share of portfolio exposure is included by asset class) and confidence (data quality strength such as counterparty data completeness and proxy reliability). This structure keeps leadership aligned: you can expand coverage while transparently improving confidence over time.

Step 2: Expand coverage in waves (a GCC-friendly rollout plan)

Wave 1: High-signal segments
Start where you can create stable pipelines quickly: large corporates with strong financial and sector data, project finance with defined boundaries and technical inputs, and commercial real estate where building-level energy data can be requested.

Wave 2: Transition-economy middle
Scale into mid-market corporates, contractors, logistics, industrial suppliers, and trade-related exposures where activity data lives in documents.

Wave 3: SME long tail
Avoid trying to perfect this on day one. Apply stable proxy logic, prioritize top emitters by exposure and sector, and improve data over time rather than delaying disclosure indefinitely.

Step 3: Build a GCC-specific counterparty data request pack

Financed emissions accelerates when banks standardize what they request. A practical pack includes organizational boundary and consolidation approach, latest Scope 1 and Scope 2 footprint with methodology notes, intensity drivers for normalization (production, floor area, throughput), and evidence artifacts such as utility invoices, meter exports, fuel logs, and ERP extracts.

To align operational emissions and portfolio logic, see Operational vs. Value Chain Emissions: Scope 1, 2, and 3. For Category 15 calculation framing, the GHG Protocol guidance is in GHG Protocol Scope 3 Category 15: Investments.

Part 3: Making financed emissions audit-ready (the part most teams underestimate)

A financed-emissions figure can be reasonable and still fail assurance if it is not reproducible.

The four questions auditors will ask

Design your workflow so you can answer these quickly: where the data came from, what transformations happened, who approved assumptions and changes, and whether the number can be reproduced exactly from stored evidence.

What “auditability by design” looks like

1) Evidence-first ingestion
Store source documents and extracts as linked evidence objects, tagged by counterparty and reporting period.

2) Controlled mapping to asset classes
When mapping happens informally, results vary by team. Use governed mapping rules to map exposures to PCAF asset classes consistently, informed by the third-edition standard in PCAF Part A (2025) Standard.

3) Calculation versioning
When factors, boundaries, or methods change, preserve prior versions, the rationale, and the impact on totals.

4) Disclosure-ready outputs
If reliefs or exclusions are used, document what is excluded and why, and keep an exclusions register with an action plan to reduce exclusions over time, consistent with clarifications in the December 2025 amendments to IFRS S2.

Where Coral fits: Coral is designed for evidence-linked workflows, from ingesting multi-source files to mapping governed datasets and preserving an audit trail tied to outputs. Explore Emissions Management System and ESG Reporting.

Common mistakes GCC institutions should avoid

• Treating financed emissions as a sustainability side project rather than a cross-functional data product across Finance, Risk, Credit, and ESG.
• Overfitting the first-year number instead of building stable governed logic and improving data quality over time.
• Reporting high coverage while hiding major exclusions in footnotes rather than managing them openly.
• Publishing numbers without a reproducible evidence trail, which increases assurance risk and internal trust issues.

Next step

If you want to see what an audit-ready financed emissions workflow looks like in practice, you can book a demo, or contact us to discuss your current attribution, coverage, and assurance requirements.

FAQ

What is financed emissions (Scope 3 Category 15) in plain English?

Financed emissions are the portion of a counterparty’s emissions that a financial institution attributes to its loans and investments. In greenhouse gas reporting, this sits under Scope 3 Category 15 (Investments), described in the GHG Protocol Scope 3 Category 15: Investments.

What is a minimum defensible starting point for a GCC institution?

A baseline that clearly states portfolio perimeter, included asset classes, major exclusions and why, and a data quality approach with a time-bound improvement plan. Transparency and reproducibility matter as much as first-year precision.

How should syndicated exposures be treated to avoid attribution drift?

Pick one attribution basis, document it, and apply it consistently across business lines and systems. Inconsistent syndication treatment across quarters or teams is a common cause of restatements and assurance challenges, which is why many teams align to the structure and definitions in the PCAF Part A (2025) Executive Summary.

Do the ISSB / IFRS S2 amendments remove the need to measure financed emissions?

No. The amendments aim to reduce friction while keeping decision-useful disclosure. Financed emissions remains central for relevant financial activities where IFRS S2 is adopted, as described in ISSB issues targeted amendments to IFRS S2.

Do insurers need to include underwriting emissions as financed emissions?

IFRS S2 clarifications distinguish emissions associated with assets (loans and investments) from underwriting portfolios. The detailed language is set out in the December 2025 amendments to IFRS S2, subject to jurisdictional adoption and applicable requirements.