Full definition
WACI is expressed in tCO2e / €M of turnover (scopes 1+2, sometimes 1+2+3). It is indicator No. 1 of PAI (Principal Adverse Impact) under SFDR, mandatory for Article 8 and 9 funds since 2023. Simpler to calculate than PCAF financed emissions, it has a drawback: it depends on the issuer’s turnover, so a good commercial year can lower WACI without any actual emissions reduction.
Questions and answers
What is the difference between WACI and PCAF financed emissions?
WACI relates emissions to issuers’ turnover (weighted by portfolio weights). PCAF relates them to total capital (EVIC). WACI is simpler to publish, while PCAF is more rigorous on the funder’s responsibility; both coexist in SFDR reporting.