Tag: emissions

Overview
Neftaly provides a regulatory framework for emissions intensity disclosures within supply chain finance (SCF) programs, ensuring transparency, accountability, and alignment with global climate goals. This regulation targets both financial institutions and corporates engaged in supply chain financing, emphasizing accurate reporting of greenhouse gas (GHG) emissions across suppliers and financed activities.

Scope

• Covered Entities: Banks, fintechs, and other financial institutions offering supply chain finance solutions; corporates seeking financing for their supply chain operations.
• Covered Activities: Purchase financing, invoice discounting, factoring, and supplier credit programs, including upstream and downstream emissions associated with financed goods and services.
• Emissions Metrics: Focus on Scope 1, Scope 2, and material Scope 3 emissions of suppliers financed under SCF programs.

Disclosure Requirements

1. Emissions Intensity Reporting:
   • Financial institutions must report financed emissions intensity per supplier, expressed in CO₂e per monetary unit of finance or per unit of goods/services.
   • Corporates must provide supplier-level emissions data, using verified or estimated GHG inventories.
2. Standardized Calculation Methodology:
   • Neftaly mandates alignment with internationally recognized frameworks such as the GHG Protocol for corporate value chain emissions.
   • Methodologies must include clear assumptions for emissions factors, boundaries, and data quality.
3. Verification and Assurance:
   • Emissions disclosures must be subject to independent third-party verification to ensure reliability.
   • Assurance statements must confirm the accuracy, completeness, and consistency of reported emissions data.
4. Transparency and Reporting:
   • Annual emissions intensity disclosures should be published alongside SCF program reports.
   • Disclosures must highlight high-emission suppliers, emission reduction targets, and progress towards financed emissions reduction objectives.

Regulatory Oversight and Compliance

• Monitoring: Neftaly monitors compliance with emissions intensity reporting obligations, reviewing methodologies, data quality, and verification outcomes.
• Enforcement: Non-compliance may trigger corrective actions, public disclosure of breaches, or sanctions tailored to the financial institution’s role in SCF.
• Capacity Building: Neftaly offers guidance and training to ensure entities understand regulatory expectations and can implement accurate measurement and reporting practices.

Integration with Sustainable Finance

• Emissions intensity disclosures inform financing decisions, incentivizing investment in low-carbon suppliers and sustainable supply chains.
• Integration with ESG-linked SCF instruments ensures alignment with climate risk management and decarbonization pathways.

Conclusion
Neftaly’s regulation ensures that supply chain finance programs contribute to net-zero goals by embedding emissions intensity measurement and disclosure into the financing process. By standardizing reporting, verifying data, and enforcing compliance, Neftaly strengthens transparency and accountability, supporting sustainable finance practices across global supply chains.