Beneficial State Foundation Perspectives

Our thoughts on changing the banking system for good and building the new economy

Measuring a bank’s true carbon footprint

A yellow and white poster from a climate action poster is taped to a pole on a street in San Francisco. The sign says break free from fossil fuels.

Measuring a Bank’s True Carbon Footprint

Climate change threatens us all, and the consequences of inaction have created additional public health dangers for communities that already suffer from disinvestment. We face a worsening crisis with rising sea levels, extreme weather events, droughts, wildfires, and poor air and water quality.

Banks play a major role in every industry due to the role banks play as financiers. This critical impact banks have is why financial institutions must take action to reduce the carbon footprint of their investments.

In order to do so, banks should measure the impact of their lending, and disclose data that tells the story of their lending practice. Banks must also set targets to reduce their contributions to greenhouse gas emissions and ecological destruction, and CSR departments should be transparent about their progress in meeting those goals.

Taking Action to Measure Banks’ Greenhouse Gases

We are proud to be part of the solution by joining a global partnership of financial institutions called Partnership for Carbon Accounting Financials (PCAF). This global partnership powered the development of the first public report that provides a methodology for financial institutions to measure their greenhouse gas contributions. Beneficial State Foundation’s Impact team was a key contributor in the creation of a PCAF methodology for American and Canadian financial institutions.

The majority of a bank’s carbon footprint does not come from its branches or other offices; rather, a bank’s contribution to greenhouse gases occurs indirectly, through loans and investments — for example, small business loans, or project financing for the construction of oil pipelines. In carbon accounting practice, the latter is referred to as Scope 3 (investments), while the former is typically limited to Scopes 1 and 2. (See diagram below.)


Acknowledging this distinction in sources of greenhouse gas emissions, we measure our footprint annually to ensure our impact metrics are comprehensive. Read our 2020 Climate Action and Sustainability Report to learn more about our progress in reducing Beneficial State’s contributions to greenhouse gas emissions. In addition, you can see information on our financed emissions on page 32 of our 2020 Impact Report.

We’ll explore the breakdown of Beneficial State Bank’s financed emissions and our process of evaluation in a future blog post. To see all that we’re tracking, please visit our Impact site.

Maria is Beneficial State Foundation’s Director of Social Impact Research and Evaluation based in Oakland, CA.

This blog post reflects the author’s personal views and opinions and does not represent the views and opinions of Beneficial State Bank and/or Beneficial State Foundation.