S&P Global Inc. (SPGI) Earnings Call Transcript & Summary

Hello, everyone, and welcome to today's webinar. My name is Pradeep Venkatesh. I'm an Associate Director of ESG Strategy at S&P Sustainable1. It is my pleasure to moderate today's webinar, which is titled Financed Emissions, Data Quality and Reporting with Confidence with the Partnership for Carbon Accounting Financials. Before I introduce our panelists, a few housekeeping items. We recognize that the topic of today's webinar is of great interest to you, and we want this to be an interactive session. At the bottom of your screen, you will see a row of widget icons, these icons will allow you to interact with us throughout the session. I would like to point out the Q&A widget, which can be used to submit questions to the panelists. I would also like to point out the Survey widget. Please take the time to fill out our short survey after or during the webinar. We really value your insight. Additionally, you can find more content surrounding the topic in the Resource widget. The webinar is being recorded and an on-demand version will be available shortly after we conclude. If you encounter technical issues during the program, please try refreshing your browser. If issues persist, please use the Q&A widget to contact us and a member from our technical team will assist you. Now let me introduce today's speakers. Joining us, we have Chris Snyder, the Director and North American Lead for the PCAF Secretary at Guidehouse; Valeria Rolla, the Director of ESG Data and Analytics at Scotiabank; and James Salo, the Head of Environmental Research and ESG Modeling at S&P Global. Now on to the topic of today's discussion. Today, we'll be exploring the assessment and disclosure of greenhouse gas emissions associated with loans and investments by financial firms. And in particular, the various approaches taken by industry representatives in analyzing this topic. Institutions face significant pressure from regulators and investors alike to disclose the impact that their financing has on the environment. In recent years, U.S. corporate disclosures of Scope 1 and Scope 2 emissions have been rising steadily. This, however, is a complex analysis with many open questions, disclosing accurate information in light of gaps in data quality, in particular, is a challenge faced by all market participants. The challenges in data quality are most salient in analyzing Scope 3 emissions. These disclosures are keenly important across the board, but especially for financial services. Now in today's webinar, our panelists will outline their viewpoints on emissions calculations. We'll dive into some common pain points for financial institutions and the different approaches they can take to address them.

Chris, let's start off with you. Can you give us an overview of PCAF and how your organization has led the industry in emissions disclosures?

Yes. Thanks, Pradeep, for that intro. And if we can turn to the next slide. Certainly, Scope 3 emissions, as Pradeep mentioned, are really important. And turning to the next slide, please. So PCAF is an initiative by financial institutions for financial institutions. And it started in the Netherlands in 2015 with a focus on financed emissions. It has evolved beyond financed emissions. I'll talk about that in a moment. The impetus of PCAF started, as I said, in the Netherlands in 2015, just before the Paris COP, Paris Climate Conference. And it evolved and grew internally within Europe and then move to North America in 2018. And then PCAF went global in 2019 as an initiative. Move to the next slide. PCAF evolved not in a vacuum. So PCAF evolved with the basis of the guidance from WRI and WBCSD in 2011, when they published their corporate value chain accounting and reporting standard. And that was -- that informed the development of the initial threads of PCAF, moved to North America in 2018, went global in 2019, which included a global launch at New York Climate Week and the publication of 2 GHG accounting methods. That followed by significant growth in the number of signatories in PCAF. And in 2020, we launched the first global GHG accounting and reporting standard for the financial sector. As PCAF continued to grow and more signatories signed on, in 2022 -- the end of 2022, PCAF moved from an initiative to being registered as a nonprofit organization. And in 2023, the current standard of PCAF has 3 parts that covered not just finance emissions, but facilitated an insurance associates emissions as well. And I'd also like to state that the whole process around PCAF is guided by a Board of Directors, which is made up of individuals from a number of financial institutions across different types of financial institutions and geographies. Turning to the next slide, please. So the current version of the PCAF standard has 3 parts where it started and anchored is in financed emissions. So on balance sheet, emissions of the financial institution. It provides methodologies to measure and disclose emissions associated with those assets on the FIS balance sheet as well as guidance on emission removals. And the second version of Part A was launched in late 2022. In late 2023, we launched Part B officially as guidance for facilitated emissions and that is guidance for measuring and reporting the emissions associated with the activities of raising debt and equity in the capital markets. And finally, Part C is related to insurance associated emissions, which provides guidance on measuring and reporting emissions associated with insurance and reinsurance underwriting for 2 areas, which are commercial lines of insurance and personal motor lines. And it's worth noting here that PCAF continues to evolve and grow based on feedback from signatories and from the market. And we currently have three areas of new methodology development underway as well as development of more guidance around one issue, which is variation in EVIC over time and how that can affect finance emission calculations. And I should say as well here that the PCAF standard itself is publicly available that is supported by a secretariat that works to bring more financial institutions into PCAF as signatories. Yes, the standard is publicly available. Anyone can access and use it. But there are a lot of benefits to becoming signing on as a PCAF signatory, including areas around getting technical support, having access to online training of how to implement the standard and other benefits as well. So Pradeep, that provides a brief overview of how PCAF has evolved and continues to evolve, as we see the market evolving right before our eyes in terms of how both regulators and other stakeholders are looking at Scope 3 category 15-related emissions.

Of course. Thanks for that overview, Chris. Val, I was hoping to turn to you next. How does disclosing financed emissions fit into Scotiabank's larger climate work?

Absolutely. Thanks, Pradeep. If we go to the next slide, here we go. I know we have a global audience today. So first, let me introduce Scotiabank. We are one of Canada's largest bank with a strong process across the Americas. We are members of the Net Zero Banking Alliance and we're also signatories of PCAF. In our most recent climate report, which just came out last month, we have outlined 3 climate commitments. The first one is financing our climate solutions and supporting our clients to meet their own climate-focused objectives. And this also comes with a commitment to provide $350 billion in climate-related financing by 2030. We have already financed $130 billion as of the fiscal year end of 2023. Our second climate commitment is reducing our own operations, which means decarbonizing our own real estate operations, which will include Scope 1 and 2 emissions. And this will include setting targets to reduce emissions in that scopes as well as energy efficiency improvements. We also have committed to securing 100% of our electricity from emission resources in Canada by 2025 and then globally by 2030. And more relevant to today's discussion is advancing to net zero, where we have committed to achieve net zero in financed emissions by 2050. And on that note, we have interim targets as of 2030 to meet those by 2050. And then we have targets that have been set already for 3 key sectors, which include oil and gas, specifically exploration and production, power generation as well as automotive manufacturing.

Thanks. It's very interesting to hear how this fits into your larger strategy. Could you walk us through your process for calculating emissions disclosures in particular and addressing data gaps?

Sure. So we do use PCAF's global GHG accounting and reporting standards for financed emissions as Chris was just walking us through, which will be that Part A, we use it because it is publicly available, and is a globally recognized industry standard among peers as well as some of the external auditors that we have engaged and also even our regulator OSFI includes it within the guidelines as a suggested standard for us to follow. So if we simplify this very complex product in 3 phases. First one will be extracting any internal data to really understand our clients, our portfolio, what is our exposure, the location of these clients as well as any financial information from the clients that we have internally. We have this in multiple databases. So this creates even some challenges for us internally to make sure that we can match our clients internally and we can make sure all the databases are talking to each other. Then the second piece will be sourcing external data where we mostly will have gaps, which will be emissions data or production data that we don't collect internally for our clients. We use S&P Trucost to get reported emissions. So that will include Scope 1, 2 and 3 emissions for clients, productions, any financial data as well that is available and this will also help us understand client connections and hierarchy given that if we are not able to find company data directly, we can go to a level of their parents. This will intel data qualities score 2 meaning that is actual data for our clients. And as we were shown in some slides earlier, not every single client reports, we have been seeing an increase in reported data. But however, we still have some gaps, and we need to report or disclose 100% of our exposure in those portfolios. So we still need to find a way to disclose the rest of those client's emissions, and that's where we use PCAF database that provides a wide variety of emission factors at a score 4 and 5 for us to meet that. So there is some -- it is a factor and estimation, so we do find there can be some accuracy or availability. So not everything might be available there, but you could still see at score 5, you might be able to -- you will be able to calculate your finance emissions at that level. Then once we have our internal data and external data as when we compile and transform and actually do the calculations. Internally, we have a group of data scientists, and they use Python, Jupyter Notebook and Bitbucket for us to do these calculations and our key outputs are our financed emissions at a Scope 1, 2 and 3 as applicable by sector, our data quality scores and as then we have created our targets based on physical intensity. So that's as well as output that we measure. In addition to doing data as well as score 2, 4 and 5, we're also able to do at a score 3, which means based on production, and we have an internal methodology that we have created to extrapolate and have a value for score 3 in some of our sectors. And that's an overview of how we calculate and do some of this process here internally within Scotiabank.

Great. We had a question come in about the use of production level data given its availability. Is that something you've considered in your work?

Yes. So we do -- for physical intensity we use production. As I mentioned as well, when we have -- if we want to do a score 3, which is production base, we'll also get that. We do get production from S&P mainly right now, we're available. We do see that it's not widely available. So only those that we are able to find is where we can calculate at that physical intensity level and then everything else will kind of fall off from the portfolio. And we are seeing more increase in data availability, but there is some gaps in that piece. And in production, it is key for us to keep maturing in this journey for us to do the calculations.

Of course. Chris, I'd like to turn to you. From your perspective, do you see PCAF members engaging with their own clients to get better data? What are the dynamics at play there?

Yes, it's a great question. And I think it's worth stepping back and looking at data and data quality. So going to the next slide, which describes the data hierarchy that's built into the PCAF methodologies themselves really to acknowledge that this is all about data and data quality, and we want to move over time from less certain data. So that's -- in this graphic, it's score 5, which is emission estimates based on asset-level data, score 4 is based on revenue data, score 5 is -- score 3 is typically on production data. And then score 2 is reported, self-reported GHG emissions data, I should say, real economy companies. And then score 1 is the Holy Grail, which is third-party assured audited GHG emissions data. And what we're seeing as in PCAF is PCAF signatories move from their initial analysis of doing their initial financed emissions calculations that they are working to improve the data quality over time. That's one of the benefits of having this hierarchy of data quality within PCAF. And we do see that a number of PCAF signatories are thinking about how they could collect data directly from their customers and their clients. I think there are -- I know there are a lot of challenges in doing that in terms of both the capacity of their clients, but also not wanting to have an additional burden, I'll call it, a reporting burden on their clients without a reasonable use of that information once it's received. So I think there are a number of challenges there, but certainly, there is interest in doing so and getting more real data, but I think we are a little ways from having that available in general. Certainly, there's variability across size of firm and geography as well.

Of course, getting better long-term reporting from companies is ideal. In the interim, Jamie, could you give us an overview of how S&P addresses data gaps to get to decision-grade information?

Thanks very much, Pradeep. And can we move to the next slide, please? So this is a great introduction and data quality is critical when we talk about accounting for our finance emissions. But it's not simple, and as Chris was alluding to, we're on -- the market is on a journey towards maturity. The disclosure landscape is increasing and it's growing. The slide that you showed earlier that illustrated that almost half of the U.S. companies are starting to disclose Scope 1 and Scope 2, greenhouse gas emissions. It's still largely voluntary information. And so to actually ensure that there is robust information to inform the calculation of financed emissions, there's still an incredible amount of time and energy that needs to be taken on to ensure that data quality. And I'll give you a couple of examples. The first is just around looking at company disclosure. Right now, because the marketplace is voluntary even with some of the standards that are starting to emerge that still -- the quality of disclosures is vastly disparate across organizations. There can be times where scope is limited to certain regions or where there's inaccurate reporting entirely. And so there needs to be a lot of time spent really getting into the details of reporting to understand what can be taken on board as robust disclosures, what might need to be adjusted and supplemented and what really needs to be excluded to ensure that there can be really decision-grade information to inform emission inventories and accounting for organizations? The other thing to say is with regards to supplementing data with modeling, there's a lot of different ways to do this, and some can be very high level and some can be very detailed. The investments that are made within Sustainable1 in this area is really doing precise understanding of what companies are doing in order to help inform this modeling. So there's a little snapshot here to the right, which is an illustrative example showing the kind of classifications that our data team will go through to actually understand the very detailed fundamental activities that a company is involved in, so when there are data gaps, partial data gaps, where things like perhaps, the company is only disclosing carbon dioxide emissions, but not methane or other things or were they just not disclosing anything, how to fill those gaps to make sure that you have the best representation of their complete profile. So a lot of time and energy is a required here. And maybe if you go to the next slide, just to really put a point on this, is looking at this last financial year, so for financial year '22, we did a detailed dive into our treatment for the Trucost environmental data set and what we had to -- what we had to do to make sure that data was comparable across companies because we really want to inform users with that information. And what we found was quite interesting, almost 1/3, so 31% of companies that report Scope 1, so the most commonly disclosed environmental data point and greenhouse gas emission data point, about 1/3 reported their emissions, Scope 1 emissions comprehensively. So you could use it right off the box, right off the label and you'd be in a good shape. However, there was about almost half, so 43% that required some kind of supplementing. So maybe this was only a small percentage of emissions or maybe this was a large percentage of emissions, doing things like I mentioned before, where perhaps they were only disclosing carbon dioxide, not the other relevant [ Kyoto ] greenhouse gas emissions or maybe they're only reporting a headquarters or 1 country of operations. And so there were significant scaling that was required to make sure that you had an inventory that was sufficient. And then even more of interest to users who really want to have robust data sets and almost a 1/4, over 1/4 of companies reported data in a way that we couldn't actually adjust. So we had to not used in our data set because of the limitations on scopes. We actually couldn't do it even with potential supplementation, techniques, et cetera, for that. So overall, there's a lot of work. It's a very -- since it's a voluntary landscape, there's a lot that needs to be done to try to make sure that you have decision-grade information. I'm a big fan of the hierarchy of sources that are used in the PCAF approach, we follow this as well, trying to take on board company emissions where we can do supplementing them when needed. And then if we can't do taking in other company production-based type data to model that. And in the absence of that, then going down to other economic modeling techniques to do that.

Thanks. Among the issues you mentioned, one in particular is year-on-year volatility where the data, reported data and baseline will change over time. How does S&P address those types of issues?

Yes. So there needs to be an understanding of scope really. There's a significant amount of time trying to understand if a company has reported emissions lines up with the same accounting principles that are used in other parts in their financial reporting, for example. So year-on-year change and year-on-year volatility can be for appropriate reasons. It can be because of a business change, units being purchased or spun-off or new power plant coming online, but there are other situations where this may be a change in scope of reporting. So we want to understand the driver, the context of these things so that you can always try to line up for any particular accounting year, the environmental impacts, the greenhouse gas emissions to that actual scope of coverage, so there's that getting into the context. And there's also looking at what we would expect given that companies make up. So again, that really detailed understanding, I was talking about classifying company into its granular business activities, that provides us with a benchmark, an understanding of what we would expect based on the sector averages for all those different business activities and what we would expect for companies Scope 1, Scope 2 greenhouse gas emissions. And if the disclosure deviates significantly from that, it's a red flag. It means that there's a reason to pause, to investigate further, to try to engage and reach out for more information. So those are some of the ways.

Thanks. Sticking with this topic of volatility. Chris, how does PCAF recommend signatories address this topic?

Yes, Pradeep, great question. So PCAF gives flexibility. But I would say the philosophy of like with like, so matching GHG emissions data with the fiscal year, that same fiscal year is a good approach, but we also give the flexibility if NFI wants to provide more use, more recent financial data with the typical 2-year lag of GHG emissions data that we see, that's fine too, but they need to disclose how they're actually doing that.

Of course, thanks for giving that response. Val, a question for you. What type of data do you get direct -- do you source directly from companies and their sustainability reports? Is that a source you rely on?

Sure. So actually, when we get the data from [ SC ], for example, for the climate for score 2. It actually will tell us where that data was disclosed and mostly it's either from [ CP ] or form the climate reports directly or ESG reports or any type of report that they might have it, and we can see that there. We typically don't go directly to the climate reports or ESG reports. We have hundreds of clients that we need to report on. And doing this manually is just not feasible for us to complete this exercise. If there's any particular clients that we might have a large exposure, and we're not able to find the data, the actual data for any reasons, we might try to find if there is some climate report, and we do that manually, but it's very specific cases. As I mentioned, it is not feasible for us to do that manually for hundreds of clients. So that's why we find a facilitated data package where we are able to find that. And -- but if you have a handful of clients, obviously, that is the right source is to go and find from there. We just consolidated through S&P.

Great. Thanks for discussing that. I'd like to turn now to one industry in particular, agriculture, where we've seen a lot of attention in recent years. Chris, can you talk a little bit about how PCAF is recommending analysis of the agriculture sector?

Sure. And it is, as you said, Pradeep, it is an important sector in terms of overall GHG emissions in the global economy. So under PCAF, under financed emissions, agricultural loans are a type of business loan. So that's where it handles for the PCAF methodology. This isn't really a question about data and the lack of farm-level specific data on various types of activities behind the farm gate. And that is an evolving space. There is certainly room for better data quality over time, and we expect to see better data quality over time in general, and including in the agricultural sector, but it does remain a very challenging space. There are so many variables in the ag sector in terms of emissions from a particular farm or a particular operation. So those challenges do remain in the market.

Of course. Jamie, how does S&P think about really granular business activities for more difficult segments like farming or even like green manufacturing?

Yes. So it's -- there's 2 different things to say. One is that businesses are becoming more sophisticated in the way that they are actually reporting on what they're doing. That information is kind of table stakes to be able to partition them out. As it stands right now in our current Trucost environmental data set. We've partitioned companies out into almost 500 different business activities at quite a detailed level. Now this has been a kind of stable methodology for quite some time. It doesn't necessarily account for every single green manufacturing type sector that we would like. We're in the process of updating this data set and expanding it pretty substantially to parse out some of these things. If it's wind, turbine manufacturing; or if it's parsing out, automotive manufacturing, taken on board more detailed accounting of EVs and hybrids versus internal combustion engine automobiles. There's a lot more detail of that that's coming, it's on our road map to roll out to clients, which is both going to help informed emission inventory and also give an idea as to where companies are headed directionally as far as their business involvement. But the key -- one of the key dependencies there is really also around how well organizations are communicating as to what they're doing and doing so in a way that, that can be quantified by percentage of operations or things of that nature.

Has -- have you been able to use any geospatial data or mapping data specifically for agriculture?

It's definitely an area of interest. It's kind of in the exploration phase. I'll leave it at that, Pradeep.

Of course. So Chris, turning to you for a second. How does PCAF align with other evolving regulatory framework, such as TCFD, now ISSB and the SEC new disclosure requirements?

Sure. Great question. So as a voluntary initiative and the resultant voluntary standard, it remains that, it remains an initiative by financial institutions for financial institutions. It has been referenced in a number of other documents. So in the TCFD supplemental guidance for financial institutions from a few years ago, it recommends the use of the PCAF standard, global standard for calculation of finance emissions. Val mentioned in Canada, the large bank and insurance regulator, OSFI, recommends the use of PCAF to calculate finance emissions in the upcoming disclosure requirements for those entities. And we see PCAF being referenced in a number of other areas. It's not directly referenced in the ISSB, the ISSB because it brings in TCFD, then I will say, brings PCAF along for the ride, I can say that. And we expect to see more reference to PCAF in regulatory requirements in the coming years. In the U.S. the California requirement, which is still under development, that includes the disclosure of Scope 3 emissions as we see that develop, it will have more specific guidance, and we wait to see what it actually references there.

Great. Another evolving area of interest is in private markets. How does PCAF recommend getting data on private markets and participants?

Yes, that's a great question. And that goes back to this being a data journey, really, and some of who have heard me say this before, this is a marathon and not a sprint. So we're going to collectively be asking more private -- real economy including private sector entities for data that we haven't asked them for before. And as we do that, we'll get it over time slowly improving data quality over time. So that theory of change is certainly a foundation of PCAF, the ability to get any entity to disclose data is the challenge, right? If that's not a regulatory requirement, then what are the levers candidly that you have to ask for that. So that continues to be a challenge. We do see some of our signatories who are our alternate investment managers, private equity companies. They are working with their private investees, their investees to develop data and ask for that data over time. So it is evolving. It goes back to the evolving nature of asking for this type of data that we didn't ask for before.

Of course. Jamie, how does S&P supplement this type of data, especially private markets data?

Yes. It's a great question. In private markets, you have a few options and some of them are limited by what's available in the public domain. But the first is in case of just private companies, we have modeled, economically based model profiles for companies based on, again, business, activity best business involvement information and applying economic emission factors. So that database covers about 4 million companies, but even with that, there's still limitation. So in that, it's the application of emission factors certainly is one approach which can be done in a variety of different ways and the sophistication of how those are applied really determines the quality of the emissions profiles that we're able to create. So clearly, if you have production-based data, that's great to bring in. If you don't, you have economic data. And sometimes you may be even more limited and don't have either of those, and that's a real market challenge at the moment as part of this journey that Chris was talking about as a market. So even if companies aren't necessarily disclosing in this space having some degree of better disclosures on production information, even just business activity information and financial information for private markets is helpful. But if that's not available, proprietary data can also be applied directly by users.

Of course. Sticking with private markets. Chris, a question for you about an adjustment to the financial ratios used for private markets, currently using book value where we see a larger discrepancy between market value and book value for private markets, is that something PCAF is analyzing?

Great question. So we currently have guidance -- and this is about the attribution factor. And so we currently have guidance on using total equity and debt instead of EVIC for private investees or clients. I would say those areas are areas that are still developing, and we would love more private market players to join PCAF as signatories to help drive the agenda and develop some of these -- develop potential guidance for these types of issues. I would say that in general, how PCAF works as signatories when you sign up to be a signatory briefly because I know there have been a few other questions about what that means, you commit to two things. You commit to using the global standard, the PCAF global standard to calculate emissions associated with your financing activities. And you commit to start to disclose those publicly within 3 years, not at 100% level of your portfolio, but to start your disclosure within 3 years. And you also get a number of benefits that I mentioned earlier in terms of access to technical support, access to our training environment and other benefits. There was also a question around SMEs, how can SMEs use PCAF? And the standard itself is publicly available. So anyone can use the PCAF standard. The benefit of becoming a signatory is that you help to shape and form PCAF over time. And PCAF is really an initiative by financial institutions for financial institutions, all voluntary, that is now being referenced in more and more regulatory requirements going forward.

Of course. Val, how have you and Scotiabank engage on the private markets question?

Yes, it's a great question. So far, we have been working on business loans. And as you know, we do have public and private companies. We do rely on the SAP data that does provide us a flag where we can tell if it's public or private. And as Chris mentioned, based on the PCAF standard, we used equity plus debt instead of using EVIC, which we use for public companies. We obviously see that there is a larger gap in terms of data in the private market in terms of reported data. So we do find that we have to rely on PCAF emission factors, so score 4 or 5 to be able to deliver finance submissions for that area. As we know the public companies, most likely are larger companies that are being regulated, so we can expect to actually see more push for them to report. That doesn't mean that we find data for all public companies either, but it is a bigger availability that, for sure, we find for private companies.

Great. Thanks. Chris, the questions come in about the disclosed data for PCAF. Have you and your organization been able to perform trend or analysis studies on that data set?

So PCAF doesn't prescribe a particular level of data quality to use. So it can be disclosed data, it can be estimates, it could be proxies. Along that journey that I talked about, we expect the data quality will improve over time. But along that journey and that time line, it is a combination of actual data and estimates and refinements of reported data, as Jamie talked about earlier.

Of course. How do you feel auditing will start to play in to emissions disclosures? Is that something you foresee in the future?

Yes, absolutely. And we're starting to see FIS get their financed emissions calculations third-party assured, and we expect that to continue in the future. And certainly, as we move into regulatory requirements for disclosure, then those will -- that assurance process will be an integral part of that.

Of course. Val, over to you as well, how do you feel the insurance requirements will begin to affect this market?

Absolutely. So I guess there's two responses for this. Internally for the bank, we do see that the trend is to start doing those limited assurance. It is being asked by our auditor that we should be working towards assurance. So it's not a requirement yet, but we know it's coming. So we are preparing ourselves for that. We do externally assure our Scope 1 and 2 emissions, which is our own operations, and we are looking to start doing the same for our Scope 3 financed emissions as applicable. And then on the second part of that is when there is more pressure to be assured, then we can expect some of our clients as well as to start being assured and that will move up the dial from score 2 to score 1 where they will start having that validated and assured data and then we can also start getting a better data quality score for our own financed emissions as we see the trend of our own clients getting assured as well.

Of course. Jamie, how about you? How do you see assurance affecting this market going forward?

Yes. I think it's part of the maturing birth here. I mean, we found in our research that today, the status is quite a few companies go through a verification and assurance process for Scope 1 and Scope 2, perhaps less than 20% of companies in the U.S. I think that's growing and going to continue to grow. And as that does, it will improve some of the quality of that disclosure. So it's absolutely welcome.

Absolutely. Chris, is there a recommendation for assurance quality that PCAF offers?

So PCAF does not prescribe what level of third-party assurance to provide. We're leaving that up to the market. That said, PCAF evolves is based on input from signatories. So that could evolve in the future that we may provide some guidance on that. But again, that will be driven by what the market says and what PCAF signatories are looking for, again, within a voluntary initiative.

Of course. And certainly, that switch from voluntary to regulatory mandated disclosures is something to look forward to in the future. So sticking with those lines. Chris, how do you feel that regulatory -- do you foresee any unexpected regulatory issues coming forward in the future?

So PCAF continues to evolve within a voluntary framework, driven by financial institutions who are PCAF signatories and helping to develop new asset classes. We're currently developing, as I mentioned earlier, 3 new asset classes and guidance on EVIC, variability in EVIC over time and how to manage that. We're also looking at new asset classes going forward. So looking over the horizon. So we have working groups working on that. All signatories, so this is, again, voluntary driven by what makes sense in this practical for based on input from signatories, from financial institutions. We will see what the future holds. And as a voluntary initiative, how it is adopted into a regulatory frame is quite an interesting framework to think about. And we'll see how it evolves over time. I think the drive towards getting more disclosure and getting better data quality will be the primary drivers of how this evolves over time. We want that Holy Grail of having 100% portfolio coverage as high data quality as possible. And so those are those medium- to long-term drivers that the market is striving towards within a voluntary framework of PCAF.

Certainly. That seems to be all the time we have for today. We've covered a lot. So if you have any follow-up questions, please use the Contact Us widget, and we will be glad to assist. For those who want to review anything we've covered, this session has been recorded, and you will receive an e-mail with the replay link shortly so you can access it on-demand at your own convenience. In addition, when we close out the webinar, you will be routed to our webinar survey form. We would love to hear your feedback, so please take a few moments to complete it. Thanks for joining us, and we look forward to seeing you at future events.