FutureTracker has formed a strategic partnership with Zfolio to enhance financed emissions reporting for financial services businesses.

The collaboration between FutureTracker, a leader in sustainability solutions, and Zfolio, a cutting-edge financed emissions platform, aims to empower financial services companies, particularly fund companies, to meet the growing regulatory and market demands for climate-related disclosures.

With increasing pressure on financial organisations to commit to net-zero targets and transparently report their progress, understanding and managing financed emissions has become a critical component of their sustainability strategy. The new partnership provides financial institutions with the tools they need to accurately measure, track, and reduce their portfolio emissions.

FutureTracker managing director Fred Betley said:

“Many financial organisations are now required to disclose their financed emissions across various asset classes, driven by emerging regulations and the need for greater transparency.”

In the UK, the government has implemented mandatory climate disclosures for the largest companies, including financial institutions, which align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). These regulations require companies to assess and report on how climate change impacts their business model and strategy. Additionally, the European Union’s Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR) require extensive reporting on ESG factors, including financed emissions, starting from 2024.

Peter Howard, a Zfolio founder, said:

“Measuring and managing the emissions generated by investments and lending is a complex process but growing in importance, both to meet stakeholder expectations and also to comply with international reporting regulations.”

The new partnership will see FutureTracker clients, particularly those in the banking, asset owner, asset management and insurance sectors, gain access to Zfolio products and services as part of their ongoing emissions monitoring and reporting.

  • Banks: Zfolio addresses the challenges of aggregating climate data across multiple divisions and legacy systems, providing a secure, centralized repository for loan and emissions data.
  • Asset Managers: With the rise in demand for ESG-themed funds, asset managers can use Zfolio to understand current emissions, model future impacts, and respond to investor and regulatory scrutiny.
  • Asset Owners: Zfolio enables asset owners to estimate emissions for directly managed and externally managed funds, offering detailed insights into the sources of emissions changes and the impact of investment decisions.
  • Insurance Companies: Comply with new PCAF guidance and reduce how your investments contribute to natural disaster insurance losses by using Zfolio to report both investment portfolio emissions and attributed Scope 3 emissions from insured policies.