Suez Canal Bank Joins Global Partnership for Carbon Accounting Financials to Advance Climate Transparency

Suez Canal Bank has officially joined the Partnership for Carbon Accounting Financials, a global initiative comprising more than 700 financial institutions across six continents, aimed at standardizing the measurement and disclosure of financed emissions arising from lending and investment activities. The move reflects the Egyptian bank’s ongoing efforts to integrate climate considerations across its operations and underscores its commitment to environmental sustainability, in alignment with the Central Bank of Egypt’s direction toward a greener, low-carbon economy.

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Strategic Alignment with Global Climate Accounting Standards

By adopting PCAF methodologies, Suez Canal Bank will be able to identify carbon-intensive sectors within its financing portfolio, enhance credit and portfolio risk assessments, and strengthen its capacity to design green and transition finance solutions tailored to clients’ needs. The membership marks a significant milestone in the bank’s efforts to align with international best practice in environmental, social and governance disclosure, comply with evolving regulatory requirements, and unlock new opportunities to attract climate-aligned investment.

The Partnership for Carbon Accounting Financials is a global alliance of financial institutions collaborating to develop and implement a standardized approach for assessing and disclosing the greenhouse gas emissions associated with their loans and investments. This harmonized accounting framework provides financial institutions with the foundation needed to set science-based targets and align their portfolios with the Paris Climate Agreement’s objective of limiting global warming to well below 2°C.

Understanding Financed Emissions and Their Significance

For most financial institutions, financed emissions associated with their loans and investments represent the most relevant emissions source, often accounting for over 90% of a financial institution’s total emissions. These emissions, classified under Scope 3, Category 15 of the GHG Protocol Corporate Value Chain Standard, encompass the greenhouse gas emissions associated with the operation of investments, including equity and debt investments and project finance that are not already accounted for in Scope 1 or Scope 2 emissions.

According to research cited by sustainability experts, a financial organization’s financed emissions can be up to 700 times greater than the emissions from its own operations, making it critical to accurately measure and account for them. This staggering disparity underscores why financial institutions play such a pivotal role in the global transition to a net-zero economy and why initiatives like PCAF have become essential infrastructure for climate accountability in the financial sector.

The PCAF Global Standard and Methodology

PCAF developed the Global GHG Accounting and Reporting Standard for the Financial Industry as a response to industry demand for a global, standardized approach to measure and report financed emissions. Written by a diverse, global team of financial institutions for financial institutions, the Standard combines deep industry insight with the rigor of the GHG Protocol, the supplier of the world’s most widely used greenhouse gas accounting standards.

The Standard has been reviewed by the GHG Protocol and is in conformance with the requirements set forth in the Corporate Value Chain (Scope 3) Accounting and Reporting Standard, for Category 15 investment activities. This alignment ensures that financial institutions using PCAF methodologies are meeting the highest standards of greenhouse gas accounting while enabling comparability across institutions and jurisdictions.

In December 2025, PCAF launched an update to its Global Greenhouse Gas Accounting and Reporting Standard for the Financial Industry, introducing the third edition of the Standard for Financed Emissions and Insurance-Associated Emissions. The enhanced frameworks empower financial institutions worldwide to expand their ability to transparently measure and disclose the greenhouse gas emissions associated with their financial activities.

The updated Standard reflects PCAF’s ongoing commitment to harmonize GHG accounting across the financial sector, recognizing that financial institutions manage diverse portfolios consisting of many types of financial instruments including loans, investments, insurance products and others. The 2025 update includes new asset classes, stricter Scope 3 requirements, and entirely new categories like facilitated emissions, bringing the total number of covered asset classes to ten.

Measuring Carbon Impact Across Asset Classes

PCAF’s methodology currently covers multiple asset classes that are fundamental to financial institutions’ portfolios. These include listed equity and corporate bonds, representing emissions linked to publicly traded stocks and debt instruments; business loans and unlisted equity, covering emissions associated with loans to private companies and equity stakes in unlisted businesses; project finance, addressing emissions from financing large-scale infrastructure and industrial projects; commercial real estate, residential mortgages, motor vehicle loans, and sovereign debt.

The third edition of the Standard introduced four new asset classes, including use of proceeds structures such as green bonds and loans where proceeds are ring-fenced for specific projects. This expansion enables financial institutions to account for emissions across relevant exposures more comprehensively, closing gaps in previous methodologies and enabling institutions to measure carbon impact with greater precision.

For reports published in 2025 and onwards, financial institutions must report Scope 3 emissions for all sectors within their financed portfolio, as the previous phase-in periods have now concluded. This mandate creates urgency for institutions like Suez Canal Bank to implement robust measurement and disclosure systems aligned with PCAF standards.

Egypt’s Sustainable Banking Transformation

Suez Canal Bank’s PCAF membership aligns with broader efforts by Egypt’s banking sector to advance sustainable finance under the leadership of the Central Bank of Egypt. The CBE has been proactive in promoting sustainable finance, encouraging banks to fund projects that support economic and environmental sustainability while integrating environmental, social and governance considerations into financial services.

The Central Bank of Egypt issued guiding sustainability principles for the banking sector in July 2021, focusing on six principles: building necessary capabilities and knowledge, enhancing sustainable finance, involving stakeholders, managing climate change risks, applying sustainability principles to internal activities and operations, and reporting. Following a gap analysis within the banking sector, the CBE issued binding regulations in November 2022 that mandated banks to incorporate sustainable finance policies into credit and investment policies.

These regulations required banks to establish independent departments for Sustainability and Sustainable Finance, reporting directly to the Chief Executive Officer or their deputy. Banks committed to prepare semi-annual status reports on implementation of Sustainable Finance Guiding Principles, quarterly quantitative reports on sustainable financing activities within credit portfolios, and annual Sustainability Reports prepared in accordance with the Global Reporting Initiative standards.

Within the framework of strengthening the role of banks in facing climate change, the CBE directed all Egyptian banks to measure their carbon footprints for their headquarters. This step contributes to the fifth Principle of the Guiding Principles for Sustainable Finance regarding applying principles of sustainability to bank internal activities and operations, demonstrating the banking sector’s role in driving sustainable development.

Recognition of Egypt’s Sustainable Finance Progress

Egypt’s banking sector has received international recognition for its sustainable finance advancements. The Sustainable Banking and Finance Network, a global platform under the International Finance Corporation and the World Bank Group, upgraded Egypt’s rating in 2024 from “Developing” to “Advancing.” This rating reflects the country’s progress in developing and implementing sustainable finance frameworks in line with global best practices.

Since joining SBFN, Egypt’s rating has improved four times, demonstrating consistent advancement in embedding sustainability across the financial sector. As a key international platform representing 72 countries and 96 regulatory and governmental entities from emerging markets, SBFN works to integrate sustainability principles into financial systems worldwide.

Egyptian banks have broadened their financial services to support sustainability-driven projects, including investments in renewable energy, waste recycling, and micro, small, and medium-sized enterprises. A key focus has also been on expanding financial inclusion by tailoring banking products for low- and middle-income individuals and Persons with Disabilities, ensuring accessibility and equitable economic participation.

Furthermore, 75% of Egypt’s banking sector portfolio is now aligned with the Principles for Responsible Banking, set forth by the United Nations Environment Programme Finance Initiative. Banks are actively incorporating ESG factors into their operations while fostering responsible customer engagement to stimulate sustainable economic growth.

Green Finance Mechanisms and Climate Investment

Egypt has built a comprehensive regulatory infrastructure to mobilize capital for its climate goals, including through facilitating the participation of the local private sector in sustainable projects and tapping into international capital markets. The country is utilizing several fiscal tools—such as subsidy shifts, feed-in tariffs, and tax credits—to promote clean energy projects, stimulate the green banking sector, and incentivize transparency and accountability.

Egypt is deploying a variety of financial instruments to finance green projects, including debt swaps, green or sustainable bonds, concessional loans, and blended finance structures. In early 2026, Egypt secured €688 million in green bond financing, approximately $750 million, to support its Climate Change Strategy 2050, marking one of the largest climate-linked funding moves by an African country in recent years.

The financing, mobilized through the Global Green Bond Initiative with backing from the European Investment Bank and the United Nations Development Programme, is intended to support climate adaptation and emissions reduction projects across the country. Officials project cuts of up to 10 million tonnes of carbon dioxide equivalent and direct resilience benefits for an estimated 8.3 million people.

The green bond mobilization unfolds alongside other capital flows aimed at expanding Egypt’s climate investment pipeline. The Green Climate Fund approved a $200 million Novastar Investment Fund, complemented by a $50 million equity allocation focused on climate technology, intended to attract private capital into sectors such as renewable energy, climate-smart agriculture and resilient infrastructure.

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Green Banking Initiatives and Development Finance

The European Bank for Reconstruction and Development has played a catalytic role in Egypt’s green finance transformation. Through the Green Economy Financing Facility, EBRD has channeled $185 million into 130 projects since the program’s launch in Egypt in 2018, largely via local partner banks. A second edition worth $175 million, backed by EBRD, the European Union and the Green Climate Fund, is now underway.

These programs allow local banks to learn from development finance institutions, starting with identification of green projects, then moving to verification and reporting. Often, once banks gain that experience, they return ready for green bond frameworks, enabling capacity to grow step by step throughout the financial sector.

The Central Bank of Egypt provides specific credit lines and financing facilities targeting the green economy and sustainable finance. Eligible projects need to use renewable energy resources or achieve a reduction in resource consumption or greenhouse gas emissions by at least 20%. Projects covered by CBE initiatives include sustainable energy technologies, climate mitigation and adaptation technologies, sustainable irrigation, water desalination, sustainable land management, and recycling.

Companies such as the solar energy company SolarizEgypt and waste-to-energy startup Bio Energy Alternative Fuels have received financing under these programs. The loans to the private sector may have reduced interest rates of 5-8% if they are in Egyptian pounds and eligible for the CBE’s SMEs and Industrial Sector initiatives, with many projects also receiving 10-15% cashback grants to help businesses offset the initial cost of adopting greener technologies.

Implementation Challenges and Data Quality Considerations

While PCAF membership provides Suez Canal Bank with a robust framework for measuring financed emissions, financial institutions face several challenges in implementing comprehensive carbon accounting systems. Data quality and availability represent significant hurdles, as emissions data is often incomplete or inconsistent across asset classes and may be entirely missing in others.

Carbon emissions data is spread across multiple reporting entities, from layers of general partners to their underlying portfolio entities and then further down to their respective suppliers. Since different entities have different ways of storing this data, either manually or on centralized servers or both, data aggregation becomes complex and resource-intensive.

To address these challenges, leading financial institutions are adopting technology-driven strategies to enhance the accuracy, efficiency, and reliability of financed emissions calculations. By leveraging ESG data management platforms with advanced carbon accounting capabilities, banks can ingest data from various sources, automate calculations across multiple methodologies, and maintain centralized audit trails that ensure transparency and compliance.

PCAF addresses data quality concerns through a five-tier data quality scoring system, ranging from Score 1 (highest quality, based on reported emissions data from investee companies) to Score 5 (lowest quality, based on economic activity averages). Financial institutions are encouraged to improve data quality over time by engaging with portfolio companies to obtain more granular emissions information.

Leadership Perspectives on Climate Commitment

Commenting on Suez Canal Bank’s PCAF accession, Akef El Maghraby, CEO and Managing Director of Suez Canal Bank, emphasized that the bank has already taken proactive steps to measure emissions associated with its financing activities. He added that joining PCAF represents a key step in embedding sustainability within the bank’s business model and reinforces its commitment to adopting unified international methodologies that enhance transparency and support the expansion of green finance.

This commitment aligns with Egypt’s National Climate Change Strategy and Egypt Vision 2030, demonstrating how individual institutional actions contribute to broader national climate objectives. By measuring and disclosing financed emissions, Suez Canal Bank positions itself to make data-driven decisions about portfolio allocation, identify transition opportunities, and support clients in their own decarbonization journeys.

Angélica Afanador, Executive Director of the PCAF Secretariat, welcomed Suez Canal Bank’s accession to the partnership, describing it as an important step towards advancing sustainable finance in Egypt. She noted that by committing to measuring and reporting emissions linked to financial activities, the bank is enhancing transparency in the region and taking concrete steps towards effective emissions management.

The PCAF Secretariat provides ongoing support to member institutions through technical assistance, training programs, and peer learning networks. As of 2025, PCAF has developed a Disclosure Checklist to support financial institutions in producing PCAF-aligned disclosures, offering greater credibility to both the organization and its signatories while growing the value of having disclosures listed publicly.

Global Context and Regional Leadership

Since its global launch in 2019, PCAF has experienced significant growth, with over 700 financial institutions now committed to measuring and disclosing the GHG emissions of their portfolios. This widespread adoption reflects the financial sector’s increasing recognition of the importance of transparency and accountability in addressing climate change and aligning financial flows with global climate goals.

PCAF was created in 2015 by Dutch financial institutions, extended to North America in 2018, and scaled globally in 2019. The initiative has rapidly expanded across Latin America, Europe, Asia-Pacific, and Africa, with regional partnerships established to support implementation in diverse contexts.

In the Middle East and North Africa region, where Egypt is seeking to establish itself as a hub for green finance, Suez Canal Bank’s PCAF membership contributes to building regional capacity for climate-aligned financial practices. Since hosting COP 27 in Sharm el-Sheikh, Egypt has worked to cement its role as a leader in sustainable finance for Africa and the broader MENA region.

Alignment with International Climate Frameworks

PCAF partners with various initiatives and organizations to increase its impact among financial institutions and ensure alignment with international climate frameworks. Key partnerships include collaboration with the Science-Based Targets initiative, which helps financial actors set and achieve emissions reduction targets founded on science aligned with the Paris Agreement.

Through partnership with CDP, the global environmental disclosure platform, PCAF enables transparent disclosures allowing stakeholders to better understand the climate impact of financial institutions’ portfolios. CDP’s disclosure framework integrates the Global GHG Accounting and Reporting Standard for the Financial Industry into its Climate Change Questionnaire for Financial Services, which asks for disclosure of Scope 3 portfolio emissions.

PCAF also collaborates with the UN-convened Net-Zero Asset Owner Alliance, an international group of institutional investors delivering on a bold commitment to transition their investment portfolios to net-zero GHG emissions by 2050. These strategic partnerships ensure that PCAF methodologies remain aligned with evolving best practices and regulatory expectations globally.

Regulatory Momentum and Disclosure Requirements

The adoption of PCAF methodologies by Suez Canal Bank comes amid growing regulatory momentum for climate-related financial disclosures globally. The European Union’s Corporate Sustainability Reporting Directive requires all large companies listed on its regulated markets to report their Scope 3 emissions, with similar requirements emerging in other jurisdictions.

California’s climate laws, the International Sustainability Standards Board’s global baseline standards, and various national regulations are creating a complex landscape of disclosure requirements that financial institutions must navigate. By adopting PCAF standards proactively, Suez Canal Bank positions itself ahead of potential regulatory mandates while building systems and capabilities that will facilitate compliance as requirements evolve.

The amendments to IFRS S2 introduced in December 2025 provide targeted clarifications and reliefs for financial institutions around Scope 3 Category 15 disclosures while maintaining that financed emissions disclosure remains a core part of financial reporting. Financial institutions are expected to explain methodologies used, assumptions applied, and data sources relied upon, with disclosures sufficiently transparent to allow investors to understand exposure to climate-related transition and physical risks.

Strategic Benefits Beyond Compliance

While regulatory compliance represents an important driver for PCAF adoption, the strategic benefits extend far beyond meeting disclosure requirements. By implementing systematic financed emissions measurement, Suez Canal Bank gains valuable insights into the carbon intensity of different sectors and clients within its portfolio, enabling more sophisticated climate risk assessment and management.

Understanding financed emissions allows the bank to identify opportunities for green and transition finance, supporting clients in sectors undergoing decarbonization while gradually shifting portfolio composition toward lower-carbon activities. This transition finance capability becomes increasingly valuable as Egypt implements its Climate Change Strategy 2050 and as corporate clients face growing pressure from their own stakeholders to demonstrate climate action.

The bank’s PCAF membership also enhances its ability to attract climate-aligned investment and access international green finance facilities that require demonstrated capacity for measuring and managing climate impact. Development finance institutions and international investors increasingly prioritize partnerships with financial institutions that have robust ESG measurement and disclosure systems in place.

Building Local Capacity and Knowledge Transfer

Knowledge transfer is especially crucial in Egypt’s context, where agriculture represents a major component of the economy both in terms of livelihoods and labor force while being directly exposed to climate change impacts. The Central Bank of Egypt’s focus on capacity building works with banks’ sustainability departments and business lines such as corporate, SME, risk, and retail financing, building understanding of sustainable finance concepts so they can transfer that knowledge to customers.

A focus on financing climate mitigation projects, along with implementing modern irrigation methods in agriculture, represents important aspects of this capacity building effort. By participating in PCAF’s global network, Suez Canal Bank gains access to peer learning opportunities, technical resources, and best practice sharing that can accelerate its sustainability journey and enhance the quality of its green finance offerings.

Future Outlook and Continuous Improvement

As Suez Canal Bank begins implementing PCAF methodologies, the institution will join a global community focused on continuous improvement in financed emissions measurement and disclosure. PCAF’s ongoing development of new methodologies to broaden the scope of GHG accounting reflects its commitment to meeting evolving industry demand and ensuring that financial institutions can comprehensively assess their climate impact.

The partnership provides a platform for financial institutions to collaborate and improve GHG methodologies for the industry, forming a community focused on shared knowledge and action. Through participation in working groups, technical assistance programs, and peer learning networks, member institutions contribute to advancing the state of practice in climate accounting while benefiting from collective expertise.

For Egypt’s financial sector, Suez Canal Bank’s PCAF membership represents another step in the country’s journey toward becoming a regional leader in sustainable finance. By aligning with international best practices in climate accounting and disclosure, Egyptian banks strengthen their integration into global financial markets while supporting national climate objectives and contributing to the global transition toward a low-carbon economy.

Conclusion

Suez Canal Bank’s accession to the Partnership for Carbon Accounting Financials marks a significant milestone in both the institution’s sustainability journey and Egypt’s broader financial sector transformation. By committing to measure and disclose financed emissions using globally recognized methodologies, the bank demonstrates leadership in climate transparency and positions itself to navigate the evolving landscape of climate-related financial regulation while capturing opportunities in the growing green finance market.

The membership aligns strategic institutional objectives with national climate priorities and international best practices, creating a foundation for enhanced climate risk management, expanded green finance capacity, and strengthened stakeholder confidence. As Egypt works to implement its Climate Change Strategy 2050 and Vision 2030, the financial sector’s role in mobilizing capital for climate action becomes increasingly critical, making initiatives like PCAF essential infrastructure for achieving national and global climate goals.

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By: Montel Kamau

Serrari Financial Analyst

28th January, 2026