Hitachi collaborates with Persefoni to provide Financial Institutions with GHG Emissions…

Hitachi collaborates with Persefoni to provide Financial Institutions with GHG Emissions Calculation

Hitachi and Hitachi Systems have developed a green house gas (GHG) emissions calculation support service for investment/lending targets at financial institutions to assist in calculating financed emissions (GHG emissions from investment/lending targets).

This will be provided by Hitachi as an additional menu for the environmental information management service utilizing EcoAssist-Enterprise, in collaboration with Persefoni Japan.

The Service will collect and grasp GHG emissions information from investment/lending targets of financial institutions as primary data through EcoAssist-Enterprise, and link with Persefoni’s financial services, a cloud service for calculating, disclosing, and decarbonizing GHG emissions premised on disclosure to investors. This enables high-level calculations (Data Quality Score 2 or higher) as defined by the international PCAF standard.

The Service contributes to regional decarbonization by enabling sophisticated and streamlined financed emissions calculations at financial institutions, as well as reflecting financial institutions’ engagement activities with investment/lending targets toward decarbonization in their financed emissions.

Shiga Bank has decided to utilize the Service to calculate financed emissions, and by deploying it to other financial institutions going forward, it will accelerate domestic decarbonization efforts

Background and Challenges

Countries are moving toward obligating financial institutions to achieve net zero emissions, including financed emissions (emissions from investment/lending targets).

For financial institutions, GHG emissions from investment/lending target companies classified as Scope 3 Category 15 are relatively large, accounting for over 90% of total emissions, compared to their own Scope 1 and 2 emissions.

Currently, top-down analysis based on estimations from publicly available information of investment/lending targets is the mainstream, making it difficult to conduct bottom-up analysis due to the tremendous effort required to calculate in line with the actual situation of Category 15.

Against this backdrop, Hitachi started providing an environmental information management service based on EcoAssist-Enterprise last August for financial institutions supporting regional companies’ decarbonization management.

This has contributed to the efficient calculation of GHG emissions from small and medium-sized investment/lending targets, which are also end users.

Meanwhile, Persefoni has been providing its financial services, a cloud service for calculating, disclosing, and decarbonizing GHG emissions premised on disclosure to investors.

The Hitachi Group, through Hitachi Systems, has a track record of providing Persefoni’s financial services to financial institution customers. Leveraging Hitachi Systems’ insights and technologies in financed emissions, it has now undertaken collaboration between EcoAssist-Enterprise and Persefoni’s financial services to enable more sophisticated calculations. As a result, Hitachi has started providing the GHG emissions calculation support service for investment/lending targets to financial institutions focused on investing/lending to regional small and medium-sized companies.

About the Service

The Service supports the calculation of Scope 3 Category 15 emissions at financial institutions by combining primary GHG emissions data from investment/lending targets collected via EcoAssist-Enterprise with data held by financial institutions such as lending information, and linking this data with Persefoni’s financial services.

The data calculation is carried out on Persefoni’s PCAF-certified financial services platform for calculating and disclosing GHG emissions from investment/lending targets based on international standards required by financial institutions.

With primary GHG emissions data collected directly from investment/lending target companies, calculations are based on actual values instead of estimated secondary data from various databases. This enables bottom-up analysis for proper calculation. It also allows high-quality calculations with a Data Quality Score of 2 or higher out of the 5 levels defined by PCAF.

Shiga Bank has decided to utilize the Service to calculate financed emissions, using primary data from investment/lending target companies collected through the environmental information management service launched last August to conduct the financed emissions calculations.

Future Plans

Going forward, Hitachi and Hitachi Systems will propose and provide services and solutions to support financed emissions calculations, including further refinement of GHG emissions data, for regional financial institutions. Based on the GHG emissions information visualized through the Service, they will also support the reduction of GHG emissions from small and medium-sized companies by collaborating with regional financial institutions and local governments, thereby contributing to regional decarbonization.

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