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PCAF v3 (2022) Implementation

PCAF methodology.
Locally executable.

We implement the PCAF Global GHG Accounting and Reporting Standard (Version 3, 2022) for Category 05 Motor Vehicle Loans—with Africa-specific emission factors and real-world adjustment coefficients.

Source-based DQ scoring. WDQS calculation. Country-specific factors. Everything documented.

Financed Emissions Methodology: Motor Vehicle Loans

We calculate financed emissions using the core PCAF formula for business loans and unlisted equity, specifically adapted for motor vehicle asset classes.

Core Formula

Financed Emissions = Attribution Factor × Absolute Emissions

Attribution Factor

Outstanding Amount / EVIC

(Enterprise Value Including Cash)

Absolute Emissions

Activity Data × Emission Factor

(e.g., Fuel Consumption × kgCO2e/L)

Calculations are performed at the individual asset level (per vehicle loan) and aggregated to the portfolio level.

Asset-class-specific application

In accordance with PCAF guidance, financed emissions methodologies are applied at the asset-class level, not uniformly across portfolios.

Each asset class operates under its own:

  • > methodology selection
  • > attribution logic
  • > data hierarchy
∑ n i = 1 Business Activity(i) × Emission Factor(i) Saastain engine LMS (Loans) ACTIVITY TRANSACTION External Data EMISSION FACTOR TCo2 / $ Lended

Methodological logic applicable to one asset class is never reused or inferred for another. This isolation prevents cross-contamination of assumptions and limits audit blast radius.

Data hierarchy and proxy governance

PCAF recognizes that data availability varies significantly across asset classes, sectors, and regions. Peercarbon applies structured data hierarchies consistent with PCAF guidance.

Enabling Institutions to:

  • 01. Apply primary data where available
  • 02. Use approved proxies where necessary
  • 03. Explicitly disclose proxy use
  • 04. Assign and preserve data quality scores

Proxy use is treated as a governed methodological decision, not a temporary workaround. All proxy selections are documented, justified, exposure-weighted, and traceable.

Methodology control and versioning

Methodology Control

Uncontrolled methodological change creates reporting risk.

  • / Explicit methodology versioning
  • / Locked calculations for closed reporting periods
  • / Clear separation between interpretation and execution

Methodology selection is governed. Calculation execution is deterministic.

Audit Traceability

For every financed emissions output, Peercarbon preserves:

  • / governing methodology version
  • / applicable asset class & attribution logic
  • / data hierarchy & proxy selections

Enables independent review without reconstruction.

This ensures that prior disclosures remain interpretable, results are reproducible, and changes in standards do not silently rewrite history.

Scope and boundaries

Peercarbon does not claim:

elimination of uncertainty perfect data completeness substitution of institutional judgment

The platform is designed to govern uncertainty, not remove it.
By making assumptions explicit and change-controlled, Peercarbon preserves comparability and trust over time.

Why methodology governance matters

Under PCAF, methodological consistency and transparency are as important as calculation accuracy.

In environments where data quality improves, portfolio composition changes, and standards evolve, governed methodology is what prevents restatement risk, audit challenge, and loss of confidence.

PCAF §4.1 DATA QUALITY

Source-Based Data Quality Scoring

PCAF requires banks to score data quality from 1-5. Most implementations score based on data completeness. We score based on data SOURCE—because that's what PCAF actually requires.

Reference: PCAF Global GHG Standard v3 (2022), Section 4.1 Data Quality, Table 4.1

Why This Matters

Using KNBS fuel sales data gives you excellent coverage. But it's national statistics, not borrower-specific data. That's DQ 3, not DQ 2.

Using borrower-reported fuel card data is harder to collect. But it's actual consumption from the financed vehicle. That's DQ 2.

The difference determines your WDQS—and your regulatory credibility.

Kenya Source Mapping

Borrower telematics DQ 1
Borrower fuel card DQ 2
KNBS / EPRA / NTSA DQ 3
GIZ VKT estimates DQ 4
IPCC emission factors DQ 5
PORTFOLIO METRIC

Weighted Data Quality Score (WDQS)

Your portfolio-level data quality metric, weighted by financed emissions.

Formula (per PCAF §4.2):

WDQS = Σ(DQi × |Financed Emissionsi|) / Σ(|Financed Emissions|)

PCAF recommends achieving WDQS ≤ 3.0 for external reporting.

Your WDQS isn't a confession. It's a baseline. We track it across periods so improvement is visible.

Quality Ratings

1.0–1.5
Excellent
1.5–2.5
Good
2.5–3.5
Moderate
3.5–4.5
Fair
4.5–5.0
Poor

Note: Rating band labels (Excellent–Poor) are Peercarbon interpretations for guidance. PCAF defines the DQ 1-5 scale and WDQS formula; banks should determine their own quality thresholds.

AFRICA-SPECIFIC

Real-World Emission Factors

Laboratory emission factors assume European driving conditions. African roads are different.

Country Adjustment Factors

Kenya
1.30×

Road conditions, traffic

Nigeria
1.35×

Congestion, fuel quality

South Africa
1.15×

Best infrastructure

Uganda
1.35×

Infrastructure, terrain

Ethiopia
1.40×

Altitude, older fleet

Vehicle Age Degradation

Passenger vehicles 2% annual (max 30%)
Commercial vehicles 2.5% annual (max 35%)
Public transport 3% annual (max 40%)
Two/three wheelers 5% annual (max 50%)

Every adjustment is documented in the evidence pack.

Factor Sets Available

  • • NTSA (Kenya). National Transport and Safety Authority data
  • • GIZ. Deutsche Gesellschaft für Internationale Zusammenarbeit studies
  • • User Provided. Values provided directly by the reporting institution

Factor sets are versioned and hashed. Once a calculation is finalized, the factor set used is immutable.

Calculation Transparency

Every output field in the evidence pack is traceable to its source.

Field Name Description Source / Derivation
emission_factor_value The specific coefficient applied. Lookup from hashed Factor Set based on vehicle attributes.
attribution_factor Decimal share of emissions. Calculated: outstanding_amount / evic
financed_emissions_tco2 Final attributed emissions. Calculated: absolute_emissions * attribution_factor

System Glossary

Financed Emissions

The portion of absolute emissions attributed to the reporting institution.

Attribution Factor

The ratio of outstanding investment to the total value of the financed asset/company.

EVIC

Enterprise Value Including Cash. The market value of a company's equity plus debt and cash.

Outstanding Amount

The value of the loan or investment.

DQ Score

Data Quality Score (1-5), where 1 is highest quality (verified primary data) and 5 is lowest (generic proxies).

Emission Factor

Coefficient converting activity data (e.g. liters of fuel) into GHG emissions.

Verify standards alignment

Peercarbon's logic is not a black box.

It is a governed translation of global frameworks into local banking reality.

Verify Standards Alignment