CO2 FI by BCG

Net Zero for Financial Institutions

Financial institutions are faced with a lack of emissions data. In fact, today, only 3% of large corporates publish their GHG emissions. CO2 FI by BCG—our AI-powered solution for net-zero alignment in the financial services industry—solves this challenge.

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ABOUT CO2 FI

Our Solution to Carbon Accounting for Financial Services

Financial institutions are considered change agents for financing net zero globally. With their ability to direct capital flows into sustainably economic activities, they can exert tremendously positive impact on our world’s climate. However, to fulfil their role, financial institutions must be able to measure not only their portfolios’ environmental footprint but also their alignment with the Paris Agreement.

With CO2 FI by BCG, we provide our clients with the best possible emissions estimate for each individual asset in their portfolios. Combining advanced analytics with strategic planning and industry and climate expertise, CO2 FI by BCG supports clients in navigating their climate change and sustainability journey by building a robust climate data asset. Tailored specifically for the financial industry, it’s an AI-powered solution by BCG X that helps companies measure, simulate, reduce, and track their environmental footprint at scale.

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Retail and Commercial Banking

We help retail and commercial banks measure GHG emissions financed by loans and investments and support facilitated emissions measurement.

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Asset Management

We help asset managers measure GHG emissions associated with assets under management.

Principal Investors and Private Equity

We help the investors and private equity players measure GHG emissions financed by investments.

Insurance Industry

We help insurance players measure associated GHG emissions.

Retail and Commercial Banking

We help retail and commercial banks measure GHG emissions financed by loans and investments and support facilitated emissions measurement.

Asset Management

We help asset managers measure GHG emissions associated with assets under management.

Principal Investors and Private Equity

We help the investors and private equity players measure GHG emissions financed by investments.

Insurance Industry

We help insurance players measure associated GHG emissions.

Benefits

The Benefits of CO2 FI by BCG

Following a cascaded approach using the best information available from more than 50 data sources, CO2 FI by BCG provides carbon accounting, net-zero alignment, and business impact simulation.

Carbon Accounting

We use more than 50 data sources and PCAF methodology to calculate the portfolio carbon footprint financed by loans, assets, and investments across scopes 1, 2, and 3 emissions, and rely on industry-specific models to estimate non-disclosed emissions. All external data for the assessment is already included in CO2 FI by BCG, with only a minimal ask for portfolio data.
Net-Zero Alignment

Our solution calculates physical emissions intensities and compares them with established decarbonization pathways to determine the net-zero gap. It identifies technology mix and reduction levers for all emission-intense sectors including power and utilities, metals and mining, fossil fuels, real estate, aviation, and shipping.
Financial Impact Modelling

CO2 FI by BCG facilitates customizable scenario analysis to determine the best way for sectors to decarbonize and quantifies financial impact for the financial institution.

The Financed Emissions imperative: Measurement, Disclosure, & Beyond

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The Financed Emissions Imperative: Measurement, Disclosure, and Beyond

Bank-financed emissions are the most material component of a bank’s carbon footprint and are notoriously complex to estimate. Many financial institutions have committed to disclosing financed emissions, but few have delivered. Here are seven steps that can help.

Bank and Asset Manager

Rapid baselining of the carbon footprint for a major asset manager and bank to provide the necessary transparency for establishing a robust climate action strategy. We assessed decarbonization strategies both in terms of emission reduction potential and financial impact. Emission reduction potential with neutral revenue impact was assessed to equal 18% by 2030.

18%

emission reduction potential with neutral revenue impact until 2030

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European Financial Institution

Our client used CO2 FI by BCG to baseline its carbon footprint and to assess the ongoing sector-by-sector net-zero alignment. They were able to cover the entirety of the lending book with carbon emission estimates and define decarbonization strategies for their seven highest emitting sectors, amounting to an average reduction target on the emission intensity of 40% across sectors.

40%

average reduction target in emission intensity until 2030

Experts

Meet Our Team

Our tool is just one dimension of our work with clients. Our CO2 FI by BCG team has combined expertise in financed emissions, artificial intelligence, climate analytics, climate methodology, and financial institutions’ sustainability initiatives, as well as the industries our clients serve.