Financed emissions for equipment and vehicle finance

• An asset schedule, machine by machine
• Your reporting share for each financed or leased asset
• An emissions supporting pack for your assurance practitioner
• A calculation workbook with live formulas and a data improvement plan

• Evidence example

Carbon accounting software calculates from the asset data it is given. We establish that data first: the make, model, year and serial number of each machine, and the fuel, hours or telematics records that already exist.

An identified machine with fuel or activity records supports a PCAF data quality score of 1 or 2 rather than 4 or 5. Where records are missing, the data improvement plan lists what would raise the score next year.

• PCAF data quality scores for equipment loans
• Asset register reconciliation

A lender’s share of each asset’s emissions is the outstanding loan amount divided by the asset’s value at loan origination. Where the value at origination is unknown, the standard says lenders should take a conservative approach and assume 100% attribution.

Where a loan record does not hold that value, our asset-sales database supports an estimate for the same make, model and year at the origination date.

• Value at origination

For equipment and vehicle loans, the PCAF Standard calculates financed emissions asset by asset: the machine’s annual emissions multiplied by the lender’s share. Its motor vehicle loan method lists medium and heavy commercial trucks and yellow equipment, meaning earthmoving vehicles for mining and construction, among its example vehicle types.

Under AASB S2, financed emissions sit within Scope 3 Category 15 (investments). A lessor’s emissions from equipment it owns and leases to others are reported under Category 13 (downstream leased assets), depending on its reporting boundary and the lease.

• PCAF motor vehicle loans method
• AASB S2 for asset financiers
• Category 13 downstream leased assets

We work between companies, banks and auditors to assemble asset records, valuations and emissions calculations. We prepare the supporting documentation for the auditor to review. The auditor undertakes the independent assurance engagement.

• Our methodology