With nature-related risks compounding, financial institutions must create a comprehensive nature strategy now.
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.
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.
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.
Which Industries Was CO2 FI by BCG Designed For?
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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.
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Principal Investors and Private Equity
We help the investors and private equity players measure GHG emissions financed by investments.
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We help retail and commercial banks measure GHG emissions financed by loans and investments and support facilitated emissions measurement.
We help asset managers measure GHG emissions associated with assets under management.
We help the investors and private equity players measure GHG emissions financed by investments.
We help insurance players measure associated GHG emissions.
Benefits
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.
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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.
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Exclusive Download
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.
Client Success in Carbon Accounting for Financial Institutions
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
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
Meet Our Team
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Generative AI offers financial institutions a route to immense new growth—but only those that take transformative action will find their way. A new BCG report lays out a comprehensive executive roadmap.
BCG’s 20th annual study of the global payments industry examines how all participants in the payments ecosystem—including acquirers, issuers, networks, wholesale transaction banks, and fintechs—can raise their game by pursuing new strategies for growth.
Innovation is opening significant opportunities, but emboldened competitors are tightening the time frame for pursuing them.
A conversation with BCG’s Amine Benayad on the role of financial institutions in solving the climate transition and just transition.
Financial institutions have a major business opportunity in social impact. A global BCG survey reveals what’s standing in their way—and how they can up their game.
Financial institutions play a powerful role in funding global decarbonization. They can take several steps to ensure that their financing doesn’t worsen social inequity.
New research spotlights four ways companies can respond to the big changes taking place in the digital marketplace.
A BCG study reveals how top-performing companies effectively addressed the risk management challenges of recent crises and what other companies can learn from them.
Risk has always outpaced risk management, but the scale, complexity, and interconnectedness of risk today mean that businesses need a new approach.
This is no time for complacency. The improving interest rate environment may provide temporary relief, but banks need to use this cushion to fund their transformation.
Banks that fortify their core will emerge from the pandemic fitter and with the financial muscle to be a bulwark for customers and the broader community.
Insights on Net Zero for Financial Institutions
Slideshow
Use AI to Measure Emissions—Exhaustively, Accurately, and Frequently
Despite good intentions, companies say they are struggling to cut their emissions in line with targets. Their inability to measure appropriately is the leading roadblock.
Interview
A Tectonic Shift of Capital Is Just Beginning: Insights from Larry Fink
Larry Fink, the chairman and CEO of BlackRock, the world’s largest asset manager, explains how the climate crisis is fundamentally reshaping his firm’s approach to investing.
Article
Unlocking the Potential of Carbon Markets to Achieve Global Net Zero
In order to meet the Paris Agreement goals, price levels need to increase to an estimated $50-150/tonne average by 2030 from the current global average of <$5/tonne.
Guide
A Practitioner’s Guide to Operationalizing Net Zero for Banks
This guide assembles FSTF member experience, and the recommendations made in the guide provide suggestions for approaches banks can take over time as methodology, data and climate science continue to evolve.
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