Insurance-Associated Emissions The GLOBAL GHG ACCOUNTING & REPORTING Standard PART C First Version November 2022 Part C: Insurance-Associated Emissions Table of Contents Important note 3 Acknowledgements 4 Executive summary 5 1. Introduction 7 2. GHG accounting in re/insurance 12 3. 15 GHG accounting can be used as a basis to achieve business goals 4. Principles and requirements of GHG accounting for re/insurers 18 4.1 GHG accounting requirements derived from the GHG Protocol’s principles 18 4.2 Additional requirements for accounting and reporting insurance-associated emissions 20 Methodology to measure insurance-associated emissions 27 5.1 General considerations 27 5.2 Emissions associated with commercial lines portfolios 32 5.3 Emissions associated with personal motor portfolios 41 6. Reporting requirements, recommendations, and metrics 51 7. Glossary 65 8. Acronyms 68 9. 70 5. Annex 1: Due diligence for third-party data providers 10. Annex 2: Detailed data quality score tables per line of business 71 11. Annex 3: Sample table templates displaying reported emissions for a given fiscal year 75 12. Annex 4: Guiding principles for developing the GHG accounting methodology for re/insurance underwriting 78 13. Annex 5: Commercial insurance – Template to capture attribution data at the source 80 14. Annex 6: Sample classifications for vehicle types in the EU and US 81 2 Part C: Insurance-Associated Emissions Important note The Partnership for Carbon Accounting Financials (PCAF) Global GHG Accounting and Reporting Standard for the Insurance Industry ("Insurance-Associated Emissions Standard") derives from the work conducted by the PCAF’s Insurance-Associated Emissions Working Group ("Working Group"). The Working Group has, at all times, sought to ensure that the accounting methodologies and reporting requirements proposed in this Standard are compatible with applicable law, including antitrust laws. The development of the methodologies and reporting requirements set out in this Standard, including associated discussions and work undertaken by the Working Group, has been undertaken in compliance with applicable laws, including antitrust laws. The methodologies and the context provided (e.g., examples of the possible use of such methodologies) in this Standard are not to be construed as prescriptive. The adoption and use of the methodologies discussed or included in this Standard are voluntary and must be determined independently by each company. The use of such methodologies by a company is subject to applicable laws, rules and regulations in the jurisdictions in which that company operates. In case of conflict of applicable laws, rules and regulations with the methodologies or the reporting requirements described in this Standard, the applicable laws, rules and regulations shall prevail, but any deviations from the Standard should be highlighted to protect the goal and value of the Insurance-Associated Emissions Standard. The work leading to the adoption of this Standard included a public consultation on the proposed methodologies for measuring and reporting insurance-associated emissions. The consultation was open to all interested parties, including regulators, participants from across the re/insurance industry, brokers, policymakers, data providers, consultants, academia, non-governmental organizations (NGOs), associations of insureds, and civil society as a whole. The Working Group considered the input and feedback received during the consultation process, which were reflected in this Standard, to the extent it was feasible and implementable and compatible with applicable laws and regulations. 3 Part C: Insurance-Associated Emissions Acknowledgements In September 2019, the Partnership for Carbon Accounting Financials (PCAF) was launched globally to harmonise greenhouse gas (GHG) accounting methods and to enable financial institutions to consistently measure and disclose the GHG emissions financed by their loans and investments (so-called financed emissions). In 2020, the first version of The Global GHG Accounting & Reporting Standard for the Financial Industry (the "Financed Emissions Standard") was launched. As an industry-led partnership, PCAF is governed by a Steering Committee formed by ABN AMRO, Amalgamated Bank, ASN Bank, the Global Alliance for Banking on Values, Morgan Stanley, NMB Bank, Triodos Bank, and a represe