What Are Scope 3 Category 15 Emissions?


Why the most indirect emissions in banking may carry the most direct risk

In sustainable finance, Scope 3 emissions are the trickiest to measure—but also the most revealing. And within the 15 categories of Scope 3, Category 15—“Investments”—is where banks and asset managers find their climate footprint.



Scope 3 Category 15 refers to emissions associated with the investments or loans a financial institution makes. In other words, it captures the indirect emissions “financed” through capital allocation.



Example: If a bank lends to a coal plant operator, or owns shares in a cement producer, it is effectively “financing” their emissions.



Why it’s a big deal:


  1. For many financial institutions, over 95% of total emissions are in Category 15.
  2. It links capital to climate risk: the bigger the carbon footprint of your clients, the bigger your financed emissions.
  3. It’s central to the Partnership for Carbon Accounting Financials (PCAF) methodology, which is now globally recognized.


Challenges and considerations:


  1. Data quality: Emissions must often be estimated, not directly reported.
  2. Attribution rules: Share of emissions is based on ownership or loan exposure.
  3. Portfolio alignment: Scope 3 Category 15 is central to setting net-zero targets and aligning portfolios with 1.5°C pathways.

Banks, asset managers, and insurers are under growing pressure to measure, disclose, and reduce these emissions—and eventually link them to incentives and capital costs.



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