Analysis of carbon reporting in the European financial sector

82 financial institutions – banks, insurers and asset managers – put to the test of the PCAF standard

A financial institution's CO2 emissions are never found in its offices: 99% of them lie in the activities it finances, facilitates or insures. These are financed emissions, otherwise known as scope 3. While this data is becoming essential for assessing transition risk, the credibility of climate commitments and the allocation of capital, comparing it remains difficult.

Axylia is publishing the Score Carbone Finance (SCF), the first European study assessing the maturity of carbon reporting by banks, insurers and asset managers. Based on the Partnership for Carbon Accounting Financials (PCAF) standard, the Score evaluates each institution's ability to produce information that is sufficiently complete, robust and readable. In short, PCAF sets out what institutions must measure and disclose, while Axylia's Score Carbone Finance indicates whether the published information is sufficiently complete, reliable and transparent, using that common standard as a benchmark.

Unprecedented work at European scale

Axylia reviewed more than 16,000 pages of annual reports, sustainability reports, TCFD reports and prudential disclosures published by 82 listed European institutions. The relevant information is often scattered across several documents, in formats that are hard to compare. To identify and analyse it, Axylia used AI, with support from Fidestra, to develop a language model specialised in the PCAF standard. More than three months of work were needed to make the tool reliable. It identifies and structures the relevant information, while Axylia's analysts check the results, correct errors and document each assessment.

This analysis formed the basis of the SCF. Every institution is assessed against the same criteria: the share of activities covered, data quality, the calculation method used, the level of detail disclosed, and the tracking of emissions over time. The results are then converted into a score out of 100.

"This study is neither an academic exercise nor a ranking designed to hand out good and bad marks. It is meant to help financial institutions understand where they stand, identify the weaknesses in their reporting and focus their efforts on the most useful data. Our ambition is to make the Score Carbone Finance a genuine, practical roadmap for improving practices, strengthening transparency and better managing climate issues," say Vincent Auriac and Ferdinand Raffy of Axylia.

Banks : established reporting, but still incomplete

Banks have been measuring their financed emissions longer than other players in the financial sector. PCAF's Standard A (emissions linked to loans and investments) has existed since 2020, so some European banks already have more than five years of experience with the exercise. The seven pioneering institutions achieve an average Score Carbone Finance of 77/100, compared with 51/100 for all the others.

The main blind spot, however, remains Standard B. Only 54% of the banks concerned disclose the emissions linked to the transactions they facilitate. BNP Paribas, Crédit Agricole and Société Générale do not yet publish sufficiently complete data on facilitated emissions, scoring 0/100 on this part of the assessment, compared with 43.6/100 for the other twenty-one European banks. This gap weighs heavily on their ranking: BNP Paribas, Crédit Agricole and Société Générale rank 31st, 34th and 40th respectively in their category.

Finally, the study reveals a clear geographical divide. Dutch (ABN AMRO and ING), Scandinavian (Nordea and Handelsbanken) and British (Barclays, Lloyds and NatWest) institutions are among the top performers. Many of them helped create PCAF or were subject to climate reporting obligations earlier (such as UK banks, with an average SCF of 66.5/100).

Insurance: two businesses, two levels of maturity

Insurers are mainly assessed on the two core dimensions of their business: Standard A, for emissions linked to their investments, and Standard C, for emissions linked to the activities they insure.

Within the European panel, insurers report better under Standard A (average SCF of 59.8/100) than under Standard C (40.6/100). This gap is partly explained by the age of the methodologies: Standard A has existed since 2020, Standard C only since 2022. Data is also harder to collect for insured activities, which can span very different sectors and risks.

Norwegian insurer Gjensidige scores 90/100 for reporting on its investments, but 0/100 for its insurance activities. Conversely, Allianz scores 100/100 on its insurance activities, compared with 57/100 for its investments. Overall, 38% of insurers still publish no data at all on insurance-associated emissions.

French insurers perform below their European peers: 51.5/100 versus 55.6/100 on Standard A. The gap is wider for insured activities: 30.8/100 in France, compared with 48.7/100. AXA is the highest-ranked French insurer, with an overall score of 57.7/100 and 61.5/100 for insurance. At the other end, SCOR scores 0/100 on this component, having published no PCAF-aligned data.

Asset management and holding companies: the widest dispersion

For asset managers, the specificity is that portfolios are managed on behalf of third parties. When they hold a significant stake in a company (and therefore exert economic influence), they must account for a share of its emissions proportional to their equity stake. Applying PCAF® must therefore take into account the nature of the assets and the degree of control.

Managers specialising in listed assets score 49.1/100 on average, helped by better data availability. Unlisted assets remain harder to measure, particularly SMEs that do not publish emissions data. Holding companies average 46.8/100, a result dragged down by five institutions that publish no formalised PCAF®-compatible reporting.